Enlargement futures project : expert panel on technology, knowledge and learning : final report.
Date: 2011-07-29
Institutions: Institute for Prospective Technological Studies
Subjects: European integration, cooperation in the field of education, enlargement of the Union, modernisation aid, pre-accession aid, scientific cooperation

Enlargement Futures Project

Expert Panel on Technology, Knowledge
and Learning

Elissaveta Gourova, Ken Ducatel, James Gavigan, Fabiana
Scapolo and Paola Di Pietrogiacomo

Final Report, November 2001

European Commission

Joint Research Centre (DG JRC)

Institute for Prospective Technological Studies

http://www.jrc.es

Legal notice

Neither the European Commission nor any person acting on behalf of the Commission is responsible
for the use which might be made of the following information.

Report EUR XXXXX EN

© European Communities, 2001

Reproduction is authorised provided the source is acknowledged.

II

The ‘Enlargement Futures’ project

In  the  next  ten  years  the  European  Union  (EU)  enlargement  process  will  move
beyond its present focus on negotiations  for accession with  the  candidate  countries
and will increase the  interest  in  the  challenges  and opportunities  to be  faced  by  an
EU consisting of 25-30 member states.

The  ‘Futures’  project  completed  in  2000  by  the  Institute  for  Prospective
Technological Studies (IPTS) outlined some basic issues related to the contemporary
development  in  pre-accession  countries  (PACs)  and  their  impact  on  Europe.
However, this was only a first attempt to sketch the issue in the wider context of the
development of the EU.

The  need  to  better  understand  the  uncertainties  and  challenges  of  the  Enlargement
process was recognised at a high-level meeting in Tallinn (September 2000)1. As a
follow-up at a Steering Group meeting in Brussels (February 2001) a new foresight
activity  on  the  techno-economic  and  social  impact  of  enlargement  was  launched  –
the  ‘Enlargement  Futures’  project  –  matching  both  the  format  of  the  ‘Futures’
project and its policy relevance.

The ‘Enlargement Futures’ project examines the main contemporary technological,
economic,  political  and  social  drivers  in  the  candidate  countries  and  their  possible
impact  on  technology/science,  competitiveness  and  employment  in  the  enlarged
Union with a time horizon of ten years. In order to achieve its objectives the project
involves  experts  from  PACs  and  EU  countries  in  an  interactive  process  based  on
workshops  and  seminars  and  supported  by  background  research.  The  project  is
structured  around  four  clusters  of  issues  and  challenges  for  the  development  of
PACs and their corresponding thematic panels:

•  Economic transformation
•  Technology, knowledge and learning
•  Employment and societal change
•  Sustainability, environment and natural resources

1 see meeting notes of ‘Prospective Dialogue on EU-Enlargement: Science, Technology and Society’,  Tallinn/Estonia,
September 13/14, 2000, http://www.jrc.es/projects/enlargement/

III

                                                          
IV

Table of Contents

Executive Summary..................................................................................................................................3
Panel objectives and methodology..........................................................................................................10
Introduction.............................................................................................................................................11
Why the focus on Technology, Knowledge and Learning? ................................................................11

1.1

Chapter 1  Science and Technology Strategies .......................................................................................13
Science-, technology- and issue-driven research ....................................................................13
Introduction.....................................................................................................................................13
Future and emerging S&T frontiers ................................................................................................14
Issue driven research.......................................................................................................................21
1.2 Effective governance of science and technology ..........................................................................22
Introduction.....................................................................................................................................22
Issues of S&T governance in PACs ................................................................................................23
Future directions for S&T policy ....................................................................................................31

Chapter 2  Knowledge institutions and capacities ..................................................................................33
2.1 Towards a new knowledge infrastructure .....................................................................................33
Introduction.....................................................................................................................................33
The system of research and innovation...........................................................................................33
Future models of research ...............................................................................................................40
2.2 Technology transfer and innovation..............................................................................................41
Introduction.....................................................................................................................................41
Knowledge and technology flows...................................................................................................41
Innovation performance and demand by industry...........................................................................44
2.3 Scientific human resources and mobility ......................................................................................47
Introduction.....................................................................................................................................47
Preserving and building of new assets ............................................................................................48
Mobility of researchers in enlarged European Union .....................................................................50
2.4 New environment for research and innovation .............................................................................52

Chapter 3 Learning Capabilities .............................................................................................................55
3.1 Training and skills mismatch ........................................................................................................55
Introduction.....................................................................................................................................55
Vocational qualifications and the high tech economy.....................................................................55
Reforming vocational training provision ........................................................................................56
3.2 Towards world class higher education and training......................................................................58
Introduction.....................................................................................................................................58
Higher education trends ..................................................................................................................58
Accreditation and transferability of skills .......................................................................................62
3.3 The right to education and the danger of ‘dual society’................................................................63
Introduction.....................................................................................................................................63
Present educational gaps .................................................................................................................63
Vision for the future of education ...................................................................................................66

Future Steps ............................................................................................................................................69
Where next? ........................................................................................................................................69
Cross-cutting issues to develop...........................................................................................................69
Science and society: a key issue to develop........................................................................................70
Prospectives ........................................................................................................................................72

Bibliography ...........................................................................................................................................75

Annex I:  Participants..............................................................................................................................79
Annex II:  Background – Science and Technology priorities .................................................................83
Annex II-1: Foresight derived Science and Technology priority areas...............................................83
Annex II-2: S&T priorities in recent major prospective studies .........................................................90
Annex III:  Science and Technology – framework and priorities in pre-accession countries .................94

1

2

Executive Summary

Introduction

The  coming  ten  years  will  provide  a  period  of  possibly  unparalleled  opportunity  for
renewal  of  the  science  and  technology  (S&T)  base  and  the  building  of  necessary
knowledge-society capacities and capabilities in the Pre-Accession Countries (PACs). The
drive towards restructuring and modernisation of innovation systems at the national level
and towards changing the learning environment in candidate countries is taking place at the
same time as the development of European S&T and education shifts gear, with the launch
of  the  European  Research  Area  (ERA)  and  the  e-Learning  initiative  respectively.  The
possibilities for synergies and an opening up of national systems provides a one-off chance
for  the  PACs  to  find  a  fast  track  towards  full  integration  in  the  European  research  and
knowledge system.

However, turning opportunities into reality presents great challenges. In this paper we try to
outline some of the central areas for action today in order that PACs will be able to become
integral players in tomorrow’s European knowledge-based society. It is important to note
that these actions are aimed not just at  the PACs  governments and  people, but  call for a
concerted  effort  from  EU15  member  states  and  industry  in  order  to  achieve  an  effective
modernisation process.

Science and technology strategies

Many PACs particularly the Central and Eastern European Countries (CEECs) have a long
tradition  of  high  quality  fundamental  science  and  historically  prestigious  research
institutions.  The  period  of  transition  has  eroded  the  stability  that  S&T  needs  in  order  to
flourish, and there has been a squeeze on existing institutions and considerable strains to
adapt. Despite these strains, the greater openness of national research systems is leading to
their (re-) integration into the international science base.

Other  pre-accession  countries,  such  as  Malta,  Turkey  and  Cyprus  may  have  not
experienced  the  structural  shocks  of  transition,  but  are  nevertheless  faced  with  serious
challenges to carve out a position in  the European Research  Area and  indeed  the Global
S&T system.

Whilst fundamental science has held up quite well over the past decade, applied research in
CEECs  has  faced  a  major  downsize.  This  has  accompanied  the  collapse  of  industrial
research activity and the privatisation of public enterprises. In general, there is an urgent
need  to  redress  the  balance  in  the  research  and  development  (R&D)  systems  and  to
increase or further adapt applied research to serve the needs of a technologically advanced
economy.

For  all  PACs  the  next  few  years  will  be  ones  in  which  it  will  be  necessary  to  pursue  a
strategic pathway to (re-) establish critical competencies and capacities in the key areas
chosen. It is necessary to be selective regarding the areas in which excellence is sought; to
decide in which areas the search for excellence is a plain necessity, in which areas a low
profile should be maintained and from which research areas the countries should withdraw
altogether.  These  considerations  form  part  of  a  strategy  of  specialisation  on  the  basis  of

3

international  synergies  as  well  as  competitiveness.  They  invoke  tough  choices  for  all
countries, not just for PACs. This is of course a central theme of the policy framework of
ERA. Today  even  the wealthiest economies can no  longer pursue  a  fully  comprehensive
range of S&T options to the highest level – priorities have to be set.

A closer look at  the stated research priorities  in  published national  policy frameworks  in
PACs indicates a mirroring of priorities that are found across EU Member States and
at European level in the Framework Programme. Most national programmes reveal a
strong  continuation  of  supply-side  driven  priorities  (i.e.  scientific  and  technological
opportunity  and  interests)  including  emergent  ‘hot  themes’  such  as  biotechnology,
nanotechnology,  advanced  materials  and  strategic  necessities  like  information  and
communication technologies (ICTs). It would be appropriate to investigate the relationship
between the priorities selected and the research that is really needed in PACs. Perhaps
some  research  areas  are  earmarked  more  as  a  matter  of  national  pride  because  they  are
cutting  edge  areas.  Meanwhile,  many  national  S&T  plans  also  do  include  issue-driven
priorities  although  it  is  often  not  clear  how  they  are  established.  The  issues  are  often
country-specific  and  include  ageing  population,  knowledge-society  technologies,  specific
environmental  protection  demands  (coastal  margins,  natural  resources  and  renewables),
cultural identity, linguistic and heritage factors.

In  particular,  we  have  not  been  able  to  relate  levels  of  investments  in  research
competencies to the identified priorities. There is no clear relation between priorities and
resources that might send signals about how priority planning affects budget allocation. For
example, given severely limited resources, it might be that the need to align S&T efforts to
external funding (such as the EU Framework Programmes) may mean that research efforts
are diverted away from domestic strategic capacities and needs.

The  central  challenge  therefore  relates  to  the  overall  system  of  S&T  governance,  and
concerns the ways in which the demand and supply of S&T are balanced. On the one
hand, a stable and high-level support for fundamental science is needed in order to develop
a self-sustaining S&T system. But, not all areas can be supported. The choice of what to
support should be driven by analysis of existing and potential excellence and its relations to
specific demands of the country and its regions. Such decision-making requires the support
of  detailed  benchmarking  of  existing  performance,  and  an  open  process  involving  all
stakeholders in a debate on the identification and setting of priorities. It also  requires  the
development of a long-term and strategic view of S&T as part of national positioning
in its wider context, and one which differentiates between the challenges  faced at local,
regional and international level.

So far, only a few PACs have moved towards such transparency in S&T governance
and  only  in  a  partial  way  covering  some  constituencies  (i.e.  based  on  the  efforts  of  one
ministry or a sectoral theme). Efforts such as the foresight exercises in Hungary, Poland,
the Czech Republic and Malta may provide a model for a way forward. But there is still a
long way to go to achieve wide acceptance of these more open systems of governance.

PACs  are  facing  the  challenge  to  move  from  rhetoric  to  reality  in  S&T  policy.  New
mechanisms  are  needed  to  implement  S&T  plans  and  to  allocate  the  limited  financial
resources to  research really  needed by the industry and the  society.  This  implies,  among
other  things,  transparent,  open  and  competitive  procedures  and  criteria.  Systematic
evaluation of research results and the socio-economic impact of policy measures will also

4

be an important tool of S&T strategy aimed at quality and excellence of research and its
utilisation by industry and society.

Knowledge institutions and capacities

An essential  prerequisite  to  proper  S&T  governance  is  to  establish  a  clear  picture  of  the
supply and demand of S&T and the functioning of the whole research, development and
innovation (RDI) system. This picture is made up first of the research competencies  that
constitute the institutional base of a knowledge economy and the interactions for research,
education and innovation. Secondly, there is the demand side and the industrial capacity to
absorb new knowledge and technology. Thirdly, and equally important, there are the people
that do research – the human resources that give life and motion to the knowledge society.

In  recent  years  PACs  have  been  following  different  development  tracks  and  as  a  result
many of the R&D institutions left today are self-governing and autonomous, signalling that
greater openness has been achieved. Recent data giving an aggregate comparison between
some  PACs  and  current  EU  members  paint  a  positive picture,  suggesting  that  the  PACs
have the potential to sustain high-level research systems, at least on a par with several
current EU Member States. However, while such data certainly do give grounds for hope, it
would be premature to assume that the work of reconstructing the knowledge infrastructure
has mostly been done.

The main problems relate now in all PACs to the fragmentation of the RDI system, based
on the lack of interaction between the main actors, and thus its insufficient efficiency. The
history  of  central  planning  in  CEECs  and  the  reliance  on  public  funding  sources  have
inhibited the growth of  business-research  linkages,  and  this  contributes  to  the  difficulties
that public research institutes face today. Branch research institutes meanwhile have severe
difficulties to retain professional equipment and their best staff.

Problems of data collection leave us uncertain whether the quality and relevance of the
S&T base is suited to the needs of a knowledge economy, but certainly the lack of scale
and  fragmentation  of  the  institutions  is  a  problem.  Upgrading  and  updating  the  applied
research  capacity  and  connecting  it  to  the  industrial  demand  side  are  therefore  urgent
priorities for most candidate countries. There is no set pattern for achieving this upgrading
in  all  PACs.  But  present  developments  reveal  three  important  and  promising  trends  that
could provide a starting point: 1) the strengthening of research teams at universities, 2)
the emergence of self-standing centres of excellence, and 3) the growing participation
of PAC research teams in multinational research projects.

It is often claimed that there is a lack of industrial demand for the services that research
institutes  can  offer.  However,  competition  is  driving  domestic  industry  to  innovate  and
apply  new  technologies,  to  develop  new  products  or  upgrade  their  quality  to  meet  the
requirements  of  the  customers  or  gain  new  market  positions.  Thus,  some  enterprises  are
starting to collaborate with universities or to buy-in the services of individual researchers on
a  part-time  basis.  Some  others  are  building  up  in-house  research  capacity  or  turning  to
emerging players that offer knowledge-intensive services.

The survival of the companies has been highly dependent on the speed of change in their
productivity and competitiveness and thus the ability for fast acquisition and application
of new technologies. Presently, the main mechanisms for technology transfer in candidate
countries are mostly indirect such as:

5

•  The inward transfer of ‘hard’ (product, process) or ‘soft’ (management) technology,

mainly by foreign direct investment (FDI);

•  The  integration  of  local  firms  into  the  international  production  chain  by
subcontracting, outsourced  assembly  processes,  provision  of  distribution  services,
reverse engineering of products and/or customised production and design;

•  Forging  co-operative  industrial  alliances  with  foreign  partners  and  learning-by-

trading.

Direct technology transfer is limited to interchange  of personnel  (spin-offs from research
units or researcher-led start-ups) and is rather small scale.

While  foreign  direct  investment  is  considered  a  key  vehicle  for  technology  transfer  in
PACs, it is supported by changes in large domestic enterprises, which have often followed a
pattern of privatisation and subsequent conversion into subsidiaries or specialised suppliers
to multinational corporations. This internationalisation of ownership however rarely results
in  demands  on  local  fundamental  research  capabilities.  However,  the  need  to  adapt
technology  to  local  circumstances  has  been  facilitated  by  the  availability  of
knowledgeable  individuals.  In  addition  there  are  some  important  examples,  where  a
highly  qualified  research  workforce  has  attracted  foreign  investors  to  exploit  domestic
research  capacity,  e.g.  Nokia  in  Estonia  and  Knorr-Bremse,  Ericsson  and  Siemens  in
Hungary.

Generally, bottom-up activities are driving domestic innovation in candidate countries. This
involves  collaboration  of  industry  with  engineers  and  scientists  or  groups  of  researchers,
and networking of enterprises. However, the crucial issue for the further development of
applied  research  in  PACs  is  to  wire-up  the  innovation  system  by  encouraging
interaction  between  business,  educational  and  research  institutions.  This  requires  flexible
configurations and direct engagement of industrialists in the process of application of new
technologies.  It  points  towards  corporate  innovation  networks,  strategic  alliances,  and
multidisciplinary research centres. Given that in many cases they are starting from scratch
there may be opportunities for leapfrogging by the creation  of  new  S&T institutions that
match the demands of the knowledge society. For example:

•  Build-in  industry-university  links  from  the  start  by  co-financed  laboratories  and
technology  centres.  Incentives  for  private  sector  researchers  to  work  in  higher
education  on  a  part-time  basis.  Flexible  career  paths  between  public  and  private
research.

•  Encouragement  of  intermediaries  such  as  technology  transfer  centres,  private
research  foundations,  industrial  associations,  chambers  of  commerce  and  non-
governmental organisations (NGOs).

•  Development of poles of excellence in order to catalyse excellence and competence
at  the  urban  or  regional  level,  by  attracting  leading  researchers  to  join  forces  on
projects of regional, national or international importance.

The  establishment  of  an  environment  that  fosters  innovation  culture,  encourages
enterprises to innovate and protects industrial and intellectual property  rights is an
important  condition  for  building  a  coherent  knowledge  system  and  the  take  up  of
innovation and technological modernisation in candidate countries.

The third, vital, ingredient is scientific human capital. The abrupt decrease in research
capacity in CEECs, the limited inflow of young people in research career and the more

6

generalised threat of brain drain lead to fears that the lifeblood of research is under
threat. The loss of talented people through emigration to Western Europe and beyond
is  probably  less  significant  than  the  ‘brain  loss’  of  researchers  leaving  the  scientific
labour force altogether. However,  for the  whole  society  this  loss might have had the
positive  effect  of  increasing  the  quality  of  workers  in  other  economic  sectors.  For
example,  a  positive  by-product  is  that  researchers  may  start  their  own  technology-
based  companies  and  hence  contribute  to  growth  of  innovation  activities  of  the
industry.

The  market  economy  sets  new  requirements  for  the  R&D  workforce  to  develop
management  and  marketing  skills  necessary  for  the  competition  for  funding,  for  co-
operation with industry and with the international scientific community. Significant policy
attention is devoted in PACs also to attracting young researchers into research careers.
One aspect is the targeted replacement and updating of the research equipment so that it is
possible for researchers and university teachers to pursue a career in their home countries.
Another aspect is the specialised training and the exchange programmes for students and
young  researchers.  The  rise  in  technical  and  engineering  studies  at  undergraduate  level
might be a positive signal of a shifting balance towards more applied research.

How to preserve and build new assets and how to increase the research results and
inflow of knowledge in PACs – are important issues that need to be addressed in order to
bridge the gaps in research capacities in PACs. Paradoxically, possible solutions to brain-
drain  might  lie  in  enhancing  the  mobility  of  researchers  in  an  enlarged  EU.  The
exchange  of  experience  and  new  ideas,  international  and  regional  collaboration  and
innovation transfer could essentially contribute in the process of European integration and
improvement of quality all round. It is necessary however also to make serious efforts to
reverse the flows of researchers - particularly young researchers - from West to the East.

Learning capabilities

The process of building human capital and learning capabilities has three important aspects:

•  Meeting the present skills gaps in the labour market;
•  Guaranteeing  the  medium-term  capacity  of  the  S&T  training  system  to  deliver

technical specialists, researchers and teachers;

•  Ensuring the longer-term sustainability of society and economic growth by opening

good-quality education to all citizens.

There are concerns that although PACs have a relatively well-qualified workforce the skills
are  outdated  and  not  flexible  enough.  They  do  not  meet  the  demands  for  knowledge
workers  in  terms  of  technical  skills,  general  ICT  skills  or  transferable  skills.  There  is
evidence moreover that the gap is growing. This issue is thrown into starker terms when it
is  recognised  that  most  PACs  face  a  demographic  decline  in  their  labour  force  in  the
coming years. Reinforcing initial training is important but it will not be enough to meet the
needs to retrain existing workers.

As  regards  the  medium  term,  PACs  are  on  the  way  to  build  open  and  internationally
integrated  higher  education.  In  most  CEECs,  there  has  been  a  very  rapid  –  perhaps  too
rapid – growth in private universities. Without considering the future consequences of the
demographic decline for this increase in educational supply, there are now moves to assess
education  quality  that  will  probably  encourage  a  rationalisation of  higher  education.  The

7

international recognition of the quality of teaching and research in higher education
will emerge as an increasingly important issue in the development of higher education, not
least  because  people  want  qualifications  to  be  recognised  by  international  firms  and  in
international labour markets.

On  the  longer  time  horizon,  the  wider  educational  systems  will  require  restructuring  in
order to deliver the new forms of content and to adopt new pedagogic methods, especially
to achieve the shift from traditional methods of instruction to learning. Notwithstanding
potential  resistance  from  a  demoralised,  under-rewarded  and  ageing  teaching  profession,
the coming years can only be confronted with confidence through innovations in pedagogic
methods, including new tools and technologies, including e-learning.

However,  due  to  the  tight  budgetary  situation  there  is  a  growing  concern  about  severe
inequalities  and  people  being  left  out  of  even  basic  education.  Basically,  people  with
monetary  resources  are  increasingly  buying  their  children  out  of  the  struggling  state
education system. This trend opens the way to a dangerous downward spiral in which the
middle  classes  increasingly  distance  themselves  from  the  state  sector.  These  disparities
have  a  particularly  strong  presence  when  looking  at  poorer  regions  such  as  declining
industrial  cities  or  rural  areas.  Although  by  such  divisive  trends  the  education  of  the
technological elite might be secured, they represent a societal time bomb for the PACs.
A cohesive society cannot be built if a large proportion of the citizens of 2010 and beyond
are locked out of the fruits of the knowledge society.

Where next?

A  report  such  as  this  can  only  scratch  the  surface  of  the  wide  terrain  implied  by
‘technology, knowledge and learning’ in candidate countries. A number of issues remain
which might be further explored. How to ensure the widest participation in the knowledge
society?  Are  there  equal  opportunities  in  S&T  between  women  and  men?  How  to
encourage participation of all citizens in open and transparent S&T governance? In what
ways are ethical concerns being addressed? The specific challenges and opportunities for
PACs in these areas present possible targets of follow-up studies.

In the meantime, what futures do the S&T systems in PACs face on the 2010 time horizon?
One possible way to look at this is through three scenarios of S&T specialisation profiles at
regional and national levels:

•  Full  integration:  all  PACs  are  integrated  into  the  global/EU  S&T  system  and
specialised  in  areas  where  they  could  offer  excellence  or  have  competitive
advantage.

•  Regional co-operation: countries and/ or regions consolidate into co-operative blocs
in respect to S&T capacity, in some cases these blocs  could  transcend  borders  to
create trans-national innovative regions or corridors.

•  Uneven  and  multi-speed  progress:  big  variations  emerge  with  some  PACs  well
integrated in the global/ EU research area and others struggling to find a profile.

Where candidate countries see their competitive advantages in S&T and which targets they
set  for  future  development  might  produce  quite  different  levels  of  development.  Some
examples might be to aim at achieving the EU average R&D spending level by 2010 or to
establish a more flexible career path for researchers. Others might focus on developing e-

8

services and ICTs to speed up economic growth. Further priorities might emphasise wider
knowledge society targets and efforts to make life-long learning a reality.

It would have been interesting to take the results of this phase of the Enlargement Futures
work  further,  in  order  to  attempt  a  future  mapping  of  the  knowledge,  technology  and
learning  systems  in  PACs.  This  would  provide  categorisations  of  PACs  on  different
indicators  and  could  provide  the  basis  for  a  categorisation  of  different  strategies  for
development  relating  to  emerging  economic  and  research  specialisation  profiles,
demographic profiles and so on. However, the diversity of the different candidate countries
and the lack of consistent and comprehensive indicators presented a real challenge. Thus,
while  such  a  project  remains  worthwhile,  the  primary  requirement  for  further  studies
remains  the  improvement  of  the  analytical  base  and  the  creation  of  procedures  for
comparability across countries.

9

Panel objectives and methodology

Objectives: The aim of the Thematic Panel on ‘Technology, knowledge, and learning’
was to focus on the development of the science and technology base in PACs and the
challenges to innovation and education on the way towards a knowledge society. The
main  drivers  and  issues  of  change  in  PACs  in  these  areas  and  the  expected
developments  and  outcomes  on  a  2010  time  horizon  were  to  be  developed  and
specified in details. In order to achieve its objectives the Panel involved experts from
PACs  and  EU  member-states  in  an  interactive  process  based  on  two  workshops,
supported by background research.

Preliminary  phase:  In  the  framework  of  global  technological  trends  and  on-going
activities related to the European Research Area, the IPTS team considered it essential
to  take  preliminary  stock  of  current  science  and  technology  priorities  in  PACs  in
advance of the Panel’s work. A draft document describing the policy framework and
the declared S&T priorities in candidate countries was prepared before the first Panel
meeting and validated by experts of PACs. As starting basis of the Panel’s work, the
IPTS  team  prepared  also  a  Discussion  paper  and  a  draft  Working  paper,  the  later
forming the basis for the full Panel report.

First  Panel  meeting  (16-18  May  2001):  The  objective  of  the  first  meeting  was  to
determine the main issues and challenges for PACs related to technology, knowledge
and learning. In addition to the background papers, some important issues coming out
of  desk-research  were  incorporated  into  three  questionnaires  on  S&T  priorities,
knowledge infrastructure and learning capabilities submitted to Panel members during
the  relevant  sessions  in  order  to  support  the  brainstorming.  On  this  basis  the  Panel
provided a description of the top issues and identified the linkages between them.

Interim Period  (June-September 2001): The dialogue  with Panel members  continued
in  preparing  the  draft  Panel  report.  On  the  basis  of  a  questionnaire,  some  Panel
members provided new inputs and details on the main issues, as well as examples of
good practice and country specific information, to be considered in the report. Besides,
background research was carried out by IPTS in order to have comparable information
for all candidate countries.

Second Panel meeting (17-19 September 2001): The draft Panel report was presented
at the mid-term seminar of the ‘Enlargement Futures’ project in Prague, together with
the  draft  reports  of  the  other  Panels.  Subsequently,  the  Panel  had  a  second  meeting
with the aim of reflecting on the guidance of the Steering Group of the ‘Enlargement
Futures’ project, to discuss cross-cutting issues with other Panel reports and to focus
on the possible future options. Three sub-groups were set up to consider opportunities
for the future development in PACs in the areas of S&T priorities, knowledge systems
and learning. The outcome of this was that some future options/models were identified
related  to  some  important  factors  –  ICT  dominance  in  research,  education  and  the
society  at  all;  sustainability  in  research  centred  on  ‘star’  scientists  and  reinforcing
science-industry  links;  speed  and  scope  of  the  integration  of  PACs  in  science,
technology and education by 2010.

Preparation of final Panel report: After the ‘Enlargement Futures’ seminar in Prague,
a  draft  final  Panel  report  was  prepared  and  circulated  to  Panel  members  by  mid
October.  Their  comments  were  incorporated  in  the  final  report  published  for  a
conference in Bled (2-4 December 2001).

10

Introduction

Why the focus on Technology, Knowledge and Learning?

In  today's  so-called  new  economy,  learning  and  knowledge  have  become  key  success
factors  for  international  competitiveness  with  the  result  that  intangible  and  immaterial
resources  have  overtaken  physical  and  tangible  assets  in  order  of  importance2.  This  is
reflected by a dramatic rise to the top of the policy agenda of knowledge-related goals.

Thus,  the  European  Union  embarked  in  March  2000  on  the  so-called  Lisbon  Strategy
where the consensual aim is to make the EU by 2010 "the most competitive and dynamic
knowledge-based  economy  in  the  world,  capable  of  sustainable  economic  growth  with
more  and  better  jobs  and  greater  social  cohesion  ...//...  through  open  methods  of  co-
ordination and benchmarking". Research and innovation policy is set to become one of the
key instruments for achieving these goals, and in particular, the European Research Area
strategy promises to introduce a more consistent approach to pan-European collaboration
and  the  prioritisation  of  public  research3.  Another  major  tool  is  the  "eEurope  -  An
Information  Society  for  all"  initiative,  which  aims  to  increase  the  take-up  of  digital
technologies and to ensure that everyone has the skills to use them.

The  scale  of  this  challenge  is  already  very  daunting  for  the  present  EU  members.  The
research and innovation lag of the EU with respect to the US is well documented. On top of
this,  the  technology  gap4  between  cohesion  Member  States  and  EU  leaders  (France,
Germany,  Finland,  Sweden),  has  widened  in  recent  years  rather  than  narrowed5.  The
imminent accession to the EU of several new members in the coming years amplifies the
challenge even further.

In this brief introduction we present an interpretation of what currently  are  the meanings
behind  the  terms  technology,  knowledge  and  learning  which  policy  has  to  adjust  to,
before coming to the specific focus of the analysis in this report.

Knowledge - what we know and what we can do - describes a state or potential for action
and decision in a person, organisation or group. Technology is any systematic knowledge
applied  to  practical  ends  such  as  problem-solving  or  extending  human  capabilities.
Learning indicates some change in the state of knowledge often manifested by a change in
understanding, decision or action. As such, these are fundamental in determining continued
development in all human spheres - society (community, group identity, relationships), the
economy (the material world, services, work and production), and the realm of ideas and
culture (sciences, arts, philosophy).

In  this  report,  the  arguments  we  develop  draw  together  data,  arguments  and  prospective
views  that  directly  relate  to  priorities  and  concerns,  which  have  emerged  in  the  pre-

2 It is said that 25 - 50 % of economic growth derives from research and technology (COM(2000) 6) or 70 - 80 % from new and
improved knowledge (Key note speech by Professor Charles Edquist Linkoping University, Sweden at The Learning Region and
sustainable  Development  –  The  Case  of  the  Oresund  Region,  Denmark/Sweden  'Building  a  Cross-border  Learning  Region'
Organised by The Danish Ministry of Education, the  Swedish Ministry  of  Education  and  Science,  The  Centre  for  Educational
Research  and 
(TDS),  OECD  17-18  June  1999,
http://www.uvm.dk/konferencer/oecd/speeches.htm#charles)
3 COM (2001) 79 final (March 2001), Realising the European Union's potential: Consolidating and extending the Lisbon
Strategy. Contribution of the European Commission to the Spring European Council, Stockholm 23-24th March 2001
4 in terms of the expenditure on R&D activities relative to GDP.
5 European Commission, Second report on economic and social cohesion - Unity, solidarity, diversity for Europe, its people and
its territory (adopted on 31 January 2001)

the  Territorial  Development  Service 

(CERI)  and 

Innovation 

11

                                                          
accession countries in recent years. These are mostly articulated in 'tangible' terms that are
readily recognised by all concerned – research capacity, education system, investment and
spending, technology transfer organisations, etc. – in short, the areas which are traditionally
associated with knowledge and learning systems, and where some measures or indicators
are available to guide discussion and debate. However, the discussion is informed by the
broader more  forward-looking  view about what the  future  challenges  for  knowledge  and
learning  systems  are.  Indeed,  the  two  cannot  be  divorced  one  from  the  other.  But  the
message that should be in the back of people's minds is that for the pre-accession countries
(as  indeed  for  the  cohesion  countries)  there  are  many  ways  to  the  future  and  future
prosperity. Catch-up, is just one of them, but countries do not necessarily have to follow the
same  institutional  and  capacity  developing  path  that  the  present  prosperous  nations  have
done. Indeed, to do so might prove to be in some ways quite  inefficient, as  much  of the
knowledge  infrastructure  stock  when  lock-in  occurs,  becomes  obsolete  and  a  drag  on
further  development.  Leapfrogging  ahead  would  seem  to  be  a  much  more  attractive  and
feasible  prospect  -  especially  in  issues  relating  to  knowledge  and  learning  where  brain
power6 is the determinant asset and available wherever there are people.

6 see Romer (1998)

12

                                                          
Chapter 1
Science and Technology Strategies

1.1  Science-, technology- and issue-driven research

Introduction

In recent years there has been a resurgence of interest in science and technology (S&T). On
the  one  hand,  there  is  renewed  wonderment  about  on-going  and  dramatic  scientific
breakthroughs in nanotechnology, information technology and  biotechnology,  and  all  the
potential applications in industry and society that the new knowledge heralds. On the other
hand, many of these same developments elevate concerns that the pace of S&T is out of
step with human society. That it runs ahead so fast and on such a colossal scale that it seems
sometimes out of control.

Figure 1: Research drivers

I. Science Driven
Research

(astronomy, earth
sciences, pure- physics
chemistry & maths,
anthropology,  cultural
and social sciences,
archaeology, psychology,
...)

II.
Technology/Market
Driven Research

(nanotechnology,
materials, engineering
sciences, genomics,
organisation & processes
...)

III. Issue Driven
Research

(environment, health &
medicine, social and
economic issues, energy,
transportation, ...)

This interest and these concerns signal a need for increased policy attention to S&T. On the
one  hand,  it  is  necessary  to  examine  the  appropriate  position  of  national  innovation  and
research in respect of the frontiers of knowledge. This is particularly important given the
escalating  cost  of  maintaining  high  technology  research  capabilities.  On  the  other  hand,
there  is  a  pressure  to  make  sure  that  policy  supports  technologies  that  are  really  in  the
service  of  mankind  –  i.e.  those  that  meet  our  needs.  For  these  reasons,  S&T  policy  and
priority  setting  is  receiving  increasing  attention  in  all  countries.  The  situation  in  pre-
accession  countries (PACs) is an interesting  microcosm  of  this  more  general  story  given
their needs to climb a development trajectory and to surmount particularly large challenges
of finding adequate funding in order to achieve a restructuring and modernisation of their
S&T base.

13

PACs face the challenge that they have to play the S&T game at a global level. S&T is no
longer controllable at national or even European level, but follows breakthroughs that are
taking  place  through  the  bottom-up  efforts  of  the  international  research  community  in
universities  and  public  and  private  research  centres.  In  the  case  of  science  and
technology/market driven research (Figure 1) the pace and direction of change are largely
driven  by  factors  lying  beyond  national  borders  and  policy  instruments.  National  level
policy is therefore limited to the more passive act of prioritising the areas to build strengths
and aim at leadership and in which areas to adopt a follower position or let pass by.

But,  on  the  other  hand,  issue  driven  research  responds  to  policy  goals,  including
permanent ones (improving health & the quality of life) and some more circumstantial or
cyclical  (food  safety,  privacy  &  security,  energy).  Here  scientific  research  is  driven  by
priorities that have been identified in some way as relating to national objectives. S&T in its
basic  or  applied  modes,  understanding-orientated  or  technology-orientated  is  brought  to
bear in identifying solutions or making progress in one form or another.

•  National  S&T  policy  therefore  seeks  to  strike  an  optimal  balance  between  the
different types of research whether it is driven by issues and policies or from within
S&T.

•  Moreover  the  dynamic  nature  of  S&T  means  that  priorities  setting  requires  the
support of forward-looking assessments of where the new emerging frontiers are and
what  the  implications  are  for  economy  and  society.  This  is  one  reason  for  the
increasing interest in foresight studies.

Both these questions are tightly constrained by national S&T capability and competencies
in research centres and universities and their level of integration in the international S&T
system (see Chapter 2).

Future and emerging S&T frontiers

A review of four recent prospective studies gives some clue as to the frontiers of S&T in
the  coming  ten  years  and  beyond  reveals  a  relatively  consistent  set  of  broad  priority
categories (see Table 1 and Annex II-2). In many cases S&T driven priorities are defined
by  their  strategic  potential.  They  may  be  important  in  terms  of  emerging  opportunities:
perhaps  the  research  is  an  enabler  of  new  (e.g.  biogenomics)  or  wider  multidisciplinary
fields  (e.g.  nanotechnology).  Opportunities  can  also  present  themselves  in  areas  where
leadership  positions  need  to  be  maintained  or  built  up.  S&T  priorities  may  relate  to  the
complementary  competencies  needed  to  maintain  and  develop  technological  leadership.
For example,  ubiquitous computing calls  for  a  range  of  skills  in  hardware,  software  and
communications fields and other fundamental enabling technology fields (e.g. complexity,
advanced materials, nanotechnologies).

If we look at the results of a number of recent national foresight studies (Table 2) we can
see  a  strong  orientation  towards  issue  driven  priorities  such  as  environmental  concerns,
ageing  population,  quality  of  life  or  manufacturing  performance  (even  if  these  are
eventually translated into traditional technological categories seen in Table 1).

14

Table 1: Summary – key S&T driven priority fields

S&T field

Cited in:

Biotechnology

Nanotechnology

Information & Communications Technology
(Embedded Intelligence, Ubiquitous
Computing, Wireless internet,
New Energy sources

Cognitive science/ artificial intelligence/
knowledge management
New & advanced materials

Renewable and recyclable materials

Quantum Computing
Planetary astronomy/space research
Technology fusion leading to new disciplines
Complexity and complex systems

Millennium Project (UN)
Global trends 2015/Scenarios 2025
Strategic Futures
Emerging Thematic Priorities

Millennium Project (UN)
Strategic Futures
Emerging Thematic Priorities
Global trends 2015/Scenarios 2025
Strategic Futures
Emerging Thematic Priorities
Strategic Futures
Emerging Thematic Priorities
Millennium Project (UN)
Strategic Futures
Global trends 2015/Scenarios 2025
Emerging Thematic Priorities
Strategic Futures
Emerging Thematic Priorities
Millennium Project (UN)
Millennium Project (UN)
Global trends 2015/Scenarios 2025
Emerging Thematic Priorities

Table 2: Key societal topics in recent and on-going foresights

Key theme

Sustainable environment
Energy
Built environment, urban life, housing and use of physical space
Knowledge, skills, lifelong learning, training
The future of manufacturing
Healthier living
Global competition and integration
Ageing of society
Mobility and communication
Changing patterns of working life
Ethics and privacy
Values, Culture and Social Cohesion
The Organisation of Society & Democracy
Crime
Enlargement
Sample: Fondazione Roselli, Italy (on-going), German Futur (on-going), Norway (on-going), Sweden 2000, United
Kingdom 2000, IPTS Futures Project 2000, Austria 1998, Japan Sixth Technology Delphi 1997 Portugal 2000, Spain 1999
& 2000, Australia 1997, RAND Critical Technologies US 1998,  New Zealand 1998, Ireland 1998

Main foresight
theme
8
9
6
5
5
5
4
4
3
3
2
2
2
1
1

15

Turning now to statements from national S&T plans in PACs we can see a similar mix of
S&T led and issue led priorities (Box 1). But there are a series of policy issues regarding
the translation of objectives in plans into effective S&T activities and outcomes.

Box 1: S&T in PACs - where to focus?

Experts suggest that there are two categories of S&T areas of research to be considered:
• 

key  areas  for  PACs  in  general  –  Information  and  communication  technologies  (ICTs),  ageing
population, environment, basic science, knowledge development areas, policy research
country-specific  –  technology  areas  focusing  on  the  individual  needs  and  local/regional
specificities  and  differences  in  PACs  in  terms  of  cultural  roots,  environment  and  historical
development.

• 

Some of the key S&T areas by country include:
• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

information  society,

In  Estonia 
three  key  government-approved  areas  –  user-friendly 
biomedicine, advanced materials. In each area a national programme will be developed.
In  Bulgaria  high  importance  is  accorded  to  S&T  in  high-technology  areas,  e.g.  information
technologies, telecommunications, new materials, biotechnologies, pharmacy, precise chemistry,
new sorts of plants and animal breeds, gene engineering, etc.
In  Cyprus  S&T  research  priorities  include  water  resource  management;  protection  and
sustainable  development  of  land,  coastal  and  aquatic  environment;  preservation  of  cultural
treasure; development of innovative educational system; restructuring public institutions; tourism
management; alternative energy sources.
In  Hungary  there  are  five  broad  areas  guiding  S&T  research  –  quality  of  life,  ICTs,
environmental  and  material  resources,  agro-business  and  biotechnology,  national  heritage  and
contemporary social challenges.
In  Slovenia  funding  priorities  include  ICTs,  advanced  materials,  complexity  and  systems,
knowledge,  science  and  technologies  for  sustainability.  A  specific  focus  is  the  natural  and
cultural heritage.
In  Poland  competence  exits  in  basic  research  in  genetic  engineering  and  natural  sciences.
Research on natural resources is lacking in spite of the large existing coal industry.
In Turkey the emphasis is on ICTs, agriculture, biotechnologies, education and human resources
oriented technologies, technologies for sustainable development, and (in relation to productivity
improvement) automation technologies and tools for textile and food industry.
In Malta country specific areas are: ICTs (e-government local services, services for people with
special needs, e-commerce Financial services), distance learning, microelectronics, software and
multimedia  development; 
farming,  waste  management,
farming,  environmental 
biotechnology  and  health-related  products,  tourism  and  related  services,  land  management  and
sustainable  use  of  land,  environmental  protection  (marine  environment  and  resources),  energy
management,  water  technologies,  cultural  identity  and  linguistics,  R&D  needs  of  SMEs  -
exploitation of research results, cultural heritage and tourism).
In Lithuania S&T areas to focus on include – information technologies (for health, networking,
tele-work),  biotechnologies  &  genetics,  nuclear  research,  mechatronics  and  microsystems.
Specific  priorities  relate  to  Lithuanian  language  (translation  tools)  and  cultural  heritage
(digitalisation, multimedia form).
In  Latvia  five  key  areas  are  approved  by  the  government  –  material  sciences,  biomedicine,
information  technology,  forestry  and  wood  sciences,  lettonica  (national  cultural  heritage  and
language).

fish 

Regarding  global  trends  and  European  priorities,  in  particular  the  RTD  Framework  Programme,  all
PACs  identify  ICTs  as  research  priority  and  as  having  a  special  place  in  all  PACs  as  enabling
technologies for all sectors of economy. Most countries focus on potential application to development
of new products and services, new technologies for language translation and speech recognition, for
digitalisation and presentation in multimedia forms of cultural heritage.

16

Science-driven research

To achieve excellence, it is increasingly necessary to play in the front ranks of the global
science. Many PACs certainly have a potential to achieve excellence, drawing on traditions
of  contribution  to  fundamental  science  and  historically  prestigious  universities.  Indeed,
despite  downscaling  of  research  capacities  and  infrastructures  in  Central  and  Eastern
European Countries (CEECs), contribution and participation in fundamental research seem
to  be  rising  fast.  The  opening  up  of  PACs    research  systems,  and  the  influx  of  foreign
funding, is leading to a considerably greater (re-)integration of PACs into the international
science  base,  especially  for  countries  with  scientific  traditions  going  back  to  the  middle
ages  (e.g.  Hungary,  the  Czech  Republic).  This  is  reflected  at  present  in  a  rise  of  co-
publishing (Figure 2) and common projects with EU15 scientists. Of course this is nothing
new  also  in  countries  with  more  open  traditions,  such  as  Cyprus  and  Malta,  where  an
international orientation stems from the fact that a majority of tertiary level students leave
their  home  countries  to  study  abroad.  This  includes  graduates  of  the  Higher  Technical
Institute in Cyprus the main tertiary vocational education provider, which sends 50% of its
graduates abroad each year mainly to the US and the UK. Such flows almost certainly lead
to strong international links amongst research groups.

Figure 2: Publication activities of some PACs: papers co-authored with EU15 countries

)
e
v
i
t
a
l
u
m
m
u
c
(

s
r
e
p
a
p
f
o
r
e
b
m
u
N

6000

5000

4000

3000

2000

1000

0

Bulgaria

Romania

Hungary

Slovakia

Czech Republic

Czechoslovakia

Poland

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

Year

Source: Meske (1999)

Despite this potential there are issues facing the future of fundamental research.

•  Is it possible to maintain and enhance high scientific output and in what areas?
•  What  investments  are  required  in  equipment  and  facilities  to  allow  cutting-edge

science to continue?

Fundamental scientific performance certainly appears as a priority in the National S&T
Plans.7 They are either acknowledged in a generic way (Estonia) or in terms of explicit
but broad general priorities (Czech Republic - several areas of natural sciences; Estonia,
Latvia & others – national cultural heritage and language). This is in line with a wider
perception  that  fundamental  research  is  vital  across  the  whole  spectrum  of  knowledge

7 see Annex III

17

 
 
 
                                                          
creation and investigation. But, science driven approaches require openness to diversity,
high-risk  and  long-term  ideas  stemming  bottom-up  out  of  scientific  communities.  In
particular,  there  are  many  areas  in  which  the  scale  of  investment  in  scientific
infrastructure  calls  for  modes  of  co-ordinated  approaches  (international  networking,
large-scale  projects).  This  calls  for  explicit  and  detailed  prioritisation  in  order  to  make
sure that the implications of entering into the long-term support for these fields of science
(rather  than  others)  are  well  understood.  For  example,  big  science  facilities  (particle
accelerators,  synchrotrons,  radio  telescopes  or  shared  Internet  infrastructures  for  e-
Science) may not be achievable by countries or institutions acting alone.  It can also be
necessary  to  prioritise  efforts  aimed  at  raising  the  effectiveness  of  networking  in
emergent areas of research to create viable levels of research interaction and support for
nascent or widely dispersed research communities.

Technology/market driven research

Whilst fundamental science has held up quite well in PACs over the past decade, applied
research in CEECs has faced a major downsizing. This has accompanied the collapse of
industrial research activity and the privatisation of public enterprises. Only in Romania
and Lithuania have significant applied research capacities survived, at least up till 19998.
In the others, notably the Czech Republic, capacities are being revived progressively.

In  general,  there  is  an  urgent  need  to  redress  the  balance  in  the  R&D  systems  and  to
increase  or  further  adapt  applied  research  to  serve  the  needs  of  a  technologically
advanced economy. This cannot be done in a generic way, but needs to single out some
specific priorities. As in fundamental science, advances are occurring at an accelerating
pace and even in the most advanced countries, making progress and keeping up  to  the
state-of-the-art is increasingly contingent on the concentration of resources on fewer and
fewer priorities. For PACs, this prioritisation task also applies, but is complicated by the
more basic "catch-up" need to (re-) establish critical competencies and capacities in the
key areas chosen, compensating for the ten-year applied research and technology slump.

The  policy  and  strategy  statements  and  reports  of  ministries,  S&T  agencies,  national
research and industrial innovation strategic plans across all the PACs reveal a consistent
pattern of research priorities. As we note above, there is frequent reference to high-tech
areas  such  as  ICTs,  materials,  biotechnology  combined  with  some  nationally  specific
priorities (e.g. natural resources, forestry or  fisheries, linguistic factors).  It is frequently
difficult to appreciate how the broad S&T priorities are specified at a finer level of detail.
It is also very difficult to discern from available information the existing levels of S&T
competencies and capabilities in the different countries, and the extent to which the level
of  research  in  the  different  areas  justifies  investing  or  earmarking  resources.  This
information is a vital precursor to any discussion on the significance of foresight priorities
for applied technology-oriented research in the PACs and on what the future prioritisation
strategy should be.

An  essential  early  step  in  this  process  is  the  benchmarking  of  the  supply  side  of  S&T
competencies. This is difficult given that it is composed of a complex array of expertise
and resources including:

•  Individuals (eminent scientists, professors, practitioners, inventors, …)

8 See European Commission DG Research (1999)

18

                                                          
•  Research & development teams & groups (specialist expert teams whether in

public or private institutions, laboratories)

•  Institutions & organisations (this could be Universities, or faculties within
universities, public research organisations, branch-research organisations,
private consultancies, companies etc.)

•  Networks  (of  either  individual  scientists,  of  teams  or  organisations)  at  local,

regional, national and European/International levels

Such benchmarking is very difficult and extremely politically sensitive, especially given
the problems to arrive at reliable judgements. For example, excellence and competence is
as much a product of factors such as social and cultural resources, organisational routines
and ways of doing things, as it is of individuals.

In  all  cases,  the  significance  and  importance  of  assessing  what  constitutes  existing
capacity,  what  capacity  might  be  achievable  and  what  capacity  lies  dormant.    This
assessment of capacity can be done against a number of different criteria and can indicate
whether the investment might pay off in terms of returns at the national level.

•  How does it compare with world-class performers in the area? And what

would be required to achieve comparable performance?

•  Is domestic demand sufficient to support a high quality research capability?
•  Could domestic research capacity eventually access international markets?
•  Can the activity achieve sufficient critical mass in order to be sustainable?
•  If not, can national efforts integrate into larger trans-national efforts?

As  an  example,  a  lot  of  encouragement  has  been  given  to  develop  high-visibility  and
high-performing  centres  of  excellence  in  several  PACs  (sometimes  through  the  EU's
Fifth Framework Programme). Estonia, for example has focused policy on the fostering
of  centres  for  strategic  competence  at  the  Tartu  University  and  Tallinn  Technical
University  in  the  fields  of  biotechnology,  information  technologies  (IT),  materials  and
environmental technology (e.g. the Centres of Material Science and Gene/Biotechnology
at Tartu and Tallinn). These can be seen as Achievable Capacity. Alternatively, already in
1996, a review of industrially oriented research capacity identified 15 units possessing a
unique position in Poland, 21 units whose activities could be taken over by other units,
and  18  units  whose  existence  could  not  be  explained9.    This  is  more  in  line  with  the
assessing Existing Capacity.

Further insight is gleaned from the results of a proposal-based evaluation of centres  of
excellence in 12 PACs (excluding Turkey) carried out in the context of the international
co-operation  part  of  the  Fifth  Framework  Programme10.  The  'call  for  proposals'  in
question specified that centres should bring together theoretical and applied research and
the  natural,  social  and  economic  sciences,  using,  where  possible,  a
cover 
multidisciplinary approach. Excellence was measured against a set of six S&T criteria,
one  social  objective  criterion,  two  economic  development  criteria,  and  six  resources,
partnership and management criteria. A total of 101 out of 185 proposals received passed
the S&T excellence threshold criteria, of which 34 were short-listed following evaluation
over the complete criteria set (see Table 3 below).

9 European Commission DG Research (1999), p. 178.
10 see Rhode (2000)

19

                                                          
s
c
i
s
y
h
P

s
T
C

I

X

n
o
c
E
c
o
S

X

X

X

X

X

X

X

X

X

X

 Table 3: PAC Centres of Excellence
Institute

k
n
a
R

S&T Areas
s
l
a
i
r
e
t
a
M

r
e
e
n
g
n
E

i

l
a
c
i
d
e
M

.

n
o
r
i
v
n
E

i
c
s
o
B

i

X

1

2

3

4

5

6

7

8

9

Institute of Genetic Engineering - Kostinbrod, BULGARIA

Czech  Technical  University  in  Prague,  Faculty  of  Electrical  Engineering,
Department of Cybernetics - Prague, CZECH REPUBLIC

Collegium Budapest, Institute for Advanced Study - Budapest, HUNGARY

Hungarian  Academy  of  Sciences,  Institute  of  Experimental  Medicine  -
Budapest, HUNGARY

X

Polish  Academy  of  Sciences,  High  Pressure  Research  Centre  -  Warsaw,
POLAND

Estonian Biocentre-Tartu,Estonia

Institute of Solid State Physics, University of Latvia - Riga, LATVIA

Institute  of  Experimental  Endocrinology,  Slovak  Academy  of  Sciences  -
Bratislava, SLOVAKIA

Alfréd  Rényl  Institute  of  Mathematics,  Hungarian  Academy  of  Science  -
Budapest, HUNGARY

10

Institute of Biochemistry and Biophysics PAS - Warsaw, POLAND

11 Wroclaw University of Technology, Institute of Production Engineering and

Automation - Wroclaw, POLAND

12

13

14

The Jan Zurzycki Institute of Molecular Biology - Cracow, POLAND

Institute  of  Theoretical  and  Applied  Mechanics  of  the  Czech  Academy  of
Sciences - Prague, CZECH REPUBLIC

Institute  of  Fundamental  Technological  Research,  Polish  Academy  of
Sciences,  Centre  of  Mechanics  and  Information  Technology  -  Warsaw,
POLAND

15 University of Cyprus, Centre for Banking and Financial Research - Nicosia,

CYPRUS

X

X

X

X

X

X

X

X

16 Central Laboratory for Parallel Processing, Bulgarian Academy of Sciences

- Sofia, BULGARIA

17

Polish Academy of Sciences, Division of Food Science, Institute of Animal
Reproduction and Food Research - Olsztyn, POLAND

X

18

Polish Academy of Sciences, Institute of Physics - Warsaw, POLAND

19 Danube  Delta  National  Institute  for  Research  and  Development  -  Tulcea,

X

ROMANIA

20

Institute of Cellular Biology & Pathology  "Nicolae Simionescu” - Bucharest,
ROMANIA

X

21 Centre  of  Molecular  and  Macromolecular  Studies  of  Polish  Academy  of

X

Sciences - Lódz, POLAND

22

23

Institute  of  Mathematics  "Simion  Stoilov"  of  the  Romanian  Academy  -
Bucharest, ROMANIA

"Horia  Hulubei"  National  Institute  for  Physics  and  Nuclear  Engineering  -
Bucharest, ROMANIA

24

Polish Academy of Sciences, Institute of Mathematics - Warsaw, POLAND

25 Computer and Automation Research Institute - Budapest, HUNGARY

26

Biological  Research  Centre,  Hungarian  Academy  of  Sciences  -  Szeged,
HUNGARY

27 UNESCO Associated Centre of Excellence for Research and

 Training in Basic Sciences - Vilnius, LITHUANIA

X

X

28

Institute  of  Experimental  Medicine,  Academy  of  Sciences  of  the  Czech
Republic - Prague, CZECH REPUBLIC

X

29 Research  Institute  for  Solid  State,  Physics  and  Optics  -  Budapest,

HUNGARY

30 Centre for Transportation Research - Zilina, SLOVAKIA

20

X

X

31

32

33

Institute of Oceanology - Varua, BULGARIA

Institute of Physics, Univ. of Tartu - Tartu, ESTONIA

X

X

Agricultural  Research  Institute  Soils,  Water  use  and  Env.  -  Nicosia,
CYPRUS

X

34 National Institute of Chemistry - Ljubljana, SLOVENIA

Total

10

3

2

3

3

X

5

6

2

The main implications which were drawn from the results of this evaluation were:

•  excellence in life sciences has emerged over the past 10 years
•  excellence in physics is in decline: old equipment / leadership of old areas
•  mathematics  -  still  excellent,  fundamental  still, 

isolated,  however  big

• 

opportunities when linked up with ICT
investment  in  environmental  research  is  lacking,  as  well  as  in  environmental
technologies, in particular in energy research
•  engineering is floundering without industrial links
•  materials research is fragmented without strategies
•  qualitative independent socio-economic research is lacking

Issue driven research

Existing  or  potential  supply-side  capacity  only  gives  part  of  the  picture  needed  to
establish  priorities.  Also  needed  is  explicit  consideration  of  the  future  economic  and
social relevance of research. The risk of a growing mismatch between research activities
and industrial and social needs has to be countered. This is seen in some of the national
S&T  plans  where  there  are  references  to  nationally  specific  factors  such  as  culture,
language,  as  well  as  long-term  trends  that  affect  national  and  regional  development.
Looking  at the  stated research priorities for PACs, they reflect the same dominance  of
societal and socio-economic rationales and objectives as elsewhere, in particular the way
emerging  themes  identified  through  EU  Member  State  Foresight  exercises  are
formulated.  However,  it  is  not  necessarily  the  case  that  the  emerging  priorities
benchmarked from national -level or EU15 Foresight exercises are appropriate or best for
PACs, nor that they apply to an enlarged EU.11 Thus we can ask:

•  Do  these  priorities  correspond  to  the  type  of  research  and  competencies  really
needed? If not, why not and what then should the specific priorities be - in addition
or alternatives?

•  Do  the  EU  level  foresight  priorities  provide  a  useful  starting  point  for  the  PAC

priorities? How should they be adapted and why?

•  Are  there  particular  S&T  themes  determined  by  local  conditions,  specialisation,
geographic specificities that  are generally  relevant  to  transition  countries  but  not
necessarily to other European countries?

Research activities need to be guided by plausible future visions and scenarios of social
and economic development as well as contributing to the construction of such visions.12
A further need exists to build a good reference system with benchmarks, and indicators.
Information  systems  on  scientific  improvements  and  technologies  need  also  to  be

11  Some  national  R&D  plan  priorities  are  very  close  indeed  to  the  foresight  priorities,  e.g.  Romania  -  complex  systems  for
environmental  management,  micro  &  nanotechnologies,  natural  or  created  risk  prevention,  protection  &  rehabilitation,  food
security.
12 The scenarios & strategies method applied recently by the EU-agencies Cedefop and ETF in the field of education and training
may be particularly useful and could be more widely adopted, because its merit is mainly to bridge gaps at the interface between
research and policy or practice - Cedefop: European Centre for the Development of Vocational Training, Thessaloniki/Greece,
ETF: European Training Foundation, Turin/Italy. See: Sellin et al (2000)

21

                                                          
introduced. For example, a recent study of innovation in six candidate countries (Cyprus,
Czech  Republic,  Estonia,  Hungary,  Poland  and  Slovenia)  found  a  relative  absence  of
robust data on  innovation  performance  in  these  six  candidate  countries  suggesting  that
policy choices are being made on the basis of very partial and non-robust indicators. 13

National priorities in ERA

It is clear PACs need to follow a  prioritisation strategy that closely couples to specific
national considerations (physical resource  endowments, geographical  location,  building
on traditional areas of competence, increasing the technological intensity & re-awakening
the demand for R&D of indigenous businesses).

But a paucity of resources drives PACs (as indeed also happens in some present Member
States)  towards  aligning  national  technological  priorities  with  those  of  the  EU  RTD
Framework  Programme  in  order  to  access  funding.  This  of  course  has  many  benefits
(better integration into EU-wide research system and networks, high-level technological
co-operation  and  exchange,  etc.)  but  a  danger  exists  that  priorities  not  reflected  in  the
Framework programme are pushed aside. It is obvious that candidate countries need to
focus  on  important  European  and  global  necessities  that  are  highly  relevant  and
necessary for their development, such as ICTs. However, they also need to find niches of
excellence  for  possible  national  S&T  specialisation  closely  linked  to  the  industrial
patterns of specialisation and needs.

One important component of a resolution to such problems is the construction of a clear
view of way ahead (where we are, what we are capable of and where we want to go). The
on-going  re-structuring  of  industry  suggests  that  it  is  hardly  feasible  now  to  set  up
research  priorities  for  the  longer  term.  However,  focusing  at  present  at  the  short  and
medium  time  dimensions,  some  procedures  might  be  elaborated  for  the  longer-term
priority  setting  process  based  on  global  drivers  and  national/  local  issues  and  real
capacities.

1.2 Effective governance of science and technology

Introduction

The  deep  structural  changes  that  PACs  have  confronted  in  the  past  ten  years  pose
significant challenges to all institutional systems including S&T. These issues affect two
related but conceptually different areas of S&T governance14:

•  To  achieve  an  effective  and  open  management  and  support  of  a  scientific
infrastructure  and  the  design,  content-specification,  delivery,  selection  and
evaluation of S&T programmes;

•  And 

to 

implement  good  practice 
implementation of technical standards15.

in  respect 

to 

the  specification  and

The  efforts  by  PACs  to  achieve  such  transformations  in  S&T  governance  take  place
against pressure to fall into step with EU practices, which stress the need for transparency
&  openness,  participation  &  inclusion,  accountability,  effectiveness  and  coherence.16

13 European Commission DG Enterprise (2001)
14 See Shepard (2000)
15 Technical factors are for instance pollutant limits, pharmaceuticals licensing, vehicle safety standards, etc.
16 COM (2001) 428 final, White Paper on European Governance

22

                                                          
This is an area of high policy attention due to rising concerns that the public is politically
apathetic  and  has  lost  confidence  in  the  political  ability  to  find  solutions  to  major
problems confronting our societies.

This section concentrates on the governance of S&T priority setting and implementation.
For the most part, the present PAC systems are driven by sectoral or ministerial agendas
rather  than  achieving  a  comprehensive  mapping  of  developments.  There  are  however
emergent  examples  of  new  practices  in  some  countries  based  on  Foresight.  Such
approaches  are  more  crosscutting  and  longer  term  and  may  provide  new  avenues  for
developing more effective and transparent S&T governance systems.

The efficient governance of the S&T in PACs requires not only an efficient forward-
looking  policy  building  process.  It  is  also  important  to  consider  how  the  policy
objectives will be paid for and practical aspects of turning action plans into financial
measures. Part of the reason for aiming at better co-ordination of stakeholders is to
reduce  redundancies  in  research.  The  usage  of  new  tools  and  mechanisms  for
efficient distribution of the limited financial resources for R&D  and  the  evaluation
of the results are the key for better investment in S&T.

Issues of S&T governance in PACs

Sectoral  approaches  still  dominate  the  preparing  policy  documents  in  the  areas  of
research,  innovation,  industrial  development  and  small-  and  medium-sized  enterprises
(SMEs).  As  a  result  there  is  often  a  lack  of  integration  between  research  agendas  and
economic  policy,  duplication  of  research  and  mismatch  between  policy  plans  and
financial flows.

Responsibility for innovation is typically split across a number of state bodies covering
industrial  and  technology  policy  and/or  research  and  education  and/or  SMEs.  Only  in
Estonia,  Latvia  and  Poland  the  governments  have  defined  policies  or  strategies
addressing  innovation  as  a  separate  policy  area.  In  Cyprus  it  is  dealt  with  as  part  of
industrial policy, in Slovenia under the heading of technological development, and in the
Czech Republic in terms of both industrial and research policy.

Table  4  gives  an  overview  of  the  authorities  involved  in  the  design  and
implementation  of  R&D  and  innovation  policies  in  PACs.  The  mismatches  in  the
policy of the different responsible bodies, and sometimes the conflicting incentives
for  enterprises  and  research  units  seriously  affect  implementation.  One  of  the
consequences of low co-ordination between respective governmental departments is
that  policy  initiatives  are  not  always  directly  supported  by  effective  financial
instruments.  While,  the  multiplicity  of  research  branches  at  ministry  level  and  the
different  funding  structures  for  SMEs,  regional  development  and  technological
development17 make it very difficult to avoid duplication of measures.

17 see Annex III

23

                                                          
Table 4: S&T framework and relevant authorities18

Country
Bulgaria

policy documents

National Strategy for development of high technology
activities (1999)

Cyprus

Czech
Republic

Estonia

1999-2003 Strategic Development Plan
New industrial policy of the government for the
development of high-technology industry in Cyprus
National R&D Policy (2000)
National Programme of Oriented Research
Programme of the Support of innovative Firms in
Business Innovative Centres
Knowledge based Estonia (2001)
Learning Estonia (2001)

national authority
Ministry of Education and Science
National council on scientific and technologic
policy
Ministry of Economy
Agency on SMEs

legal measures
Higher Education Act
Act on Establishment of the National Centre for
Agricultural Science
draft Law on High-Technology Parks and High-
Technology Activities
Law on SMEs

support  structures
National Science Fund

Encouragement Bank

Planning Bureau

Research Promotion Foundation

Ministry of Education, Youth and Sports
Research and development Council
Ministry of Industry and Trade

Higher Education Act

Grant Agency

Ministry of Education
Estonian Research and Development Council

Organisation of Research and Development Act
(1997)

Estonian National Innovation Programme (1998)

Ministry of Economic Affairs

Hungary

Science and Technology Policy 2000
National research and development programs (2000)

Ministry of Education
Science and Technology Policy Council
Science Advisory Board

Bill on higher-education (1994)
Bill on Hungarian Academy of Sciences (1994)

Medium-term strategy for the development of
SMEs

Ministry of Economic Affairs
Enterprise Development Council

Law on SMEs

Latvia

National concept on Research Development

Concept on the development of the National Innovation
System (2001)
National programme for the development of SMEs
(1997)

Ministry of Education and Science
Latvian Council of Science

Ministry of Economy

Low on research activity (1992)
Low on higher-education institutions (1995)
Law on Education (1998)

18 see Annex III for details

24

Technology Centre at the Academy of
Sciences
Estonian Science Foundation
Science Competence Council
Regional Agreement for Baltic Higher
Education, Archimedes Foundation
Estonian Technology Agency

Higher Education Development Fund
National Scientific Research Fund
National Technological Development
Fund
Hungarian Development Bank
SME Target Fund
Economy Development Fund
Regional Development Fund
Regional Agreement for Baltic Higher
Education

Latvian technological centre
Latvian technology park

                                                          
Ministry of Education and Science

Ministry of Economy
Small and medium-sized business
development Agency

Ministry of Education
Malta Council for Science and Technology

State Committee for Scientific Research

Law on Higher Education
Law on Science and Studies
Law on small and medium-sized business
development

Regional Agreement for Baltic Higher
Education
SME Promotion Fund

Foundation for Science and Technology

State Committee for Scientific Research

Act on the State Committee for Scientific
Research
Act on Research and
Development Institutions
draft Law on Higher Education

Ministry of Economy

Agency for Techniques and Technology

State Aid Act

Government support program Start 2000

Law on Research activities (1991)
Higher Education Act (1999)
Act on Support of companies developing new
technologies
Law on promotion of technological development
of Slovenia (1999)
Decree on R&D support (1995)
Law on Science and TechnologyPolicy
State Aid Act
Law on Technology development zones (2001)

Slovene Development Corporation, Small
Business Development Center, Small
Business Development Fund

Small and medium industry development
organisation, Technology Development
Foundation of Turkey, Technology
Monitoring and Evaluation Board

Lithuania

Malta

Poland

Romania

Slovakia

Slovenia

Programme on computer network and Internet Services
for Lithuanian science and higher education (2000)
Medium-Term Economic Strategy (until 2005)
Medium-Term Industrial Development Policy  (2000)
Business Innovation Programme (2000)
Small and Medium-sized Business Development
Strategy until 2003 (2000)
National Science and Technology Policy Document
(1994)

Basis for National S&T Policy (1993, add. 1996)
Guidelines for innovation policy in Poland (1994, add.)
Directions of National Innovation Policy till 2002
(1999)

Programme for support of development of regional
institutions involved in technology transfer
National Plan for Research, Development and
Innovation for 1999 – 2002 (1999)

Conceptional orientation of technological policy of
industrial branches of the Slovakia up to 2003 (1999)
National Research Programme (1995)

Ministry of Education and Research
National Agency for science, technology and
innovation

Ministry of Education
Office for strategy of society, science and
technology
Ministry of Economy
National Agency for Development of SMEs
Ministry of Education, Science and Sport

Technology Policy of the Government of the Republic
of Slovenia (1994)

Ministry of Economic Affairs

Turkey

Turkish Science and Technology Policy 1993-2003
Turkish Science and Technology Policy Document
2003-2023 (under preparation)

The Scientific and Technical Research Council
of Turkey - TUBITAK

Five Year Economic development plans Industrial
R&D support Programme

State Planning Organisation

25

It  is  not  that  co-ordinated  research  and  enterprise  policies  are  not  recognised  as
critical.  Indeed,  many  countries  have  set  up  advisory  bodies  (research  councils)
precisely  to  carry  out  the  policy  decisions  and  the  co-ordination  of  research  and
development at  governmental level.19  But,  the  necessary  operational  links  between
the different actors in the innovation system are not yet developed enough to achieve
efficiency. On the other hand, only a few councils (Cyprus, Czech Republic, Latvia
& Turkey) also have functions related to co-ordination of the financial flows and the
policy implementation and evaluation. The establishment of policy implementation
institutions  at some of these councils (in Cyprus, Malta,  Turkey)  is  a  step  towards
improving the overall performance of the R&D system.

Foresight as a tool for balanced S&T policy

The institutional fragmentation is both cause and symptom of a problem that the major
stakeholders  in  innovation  are  not  integrated  in  the  determination  of  research  and
innovation  priorities.  Governments  have  traditionally  been  the  main  supporters  of
research and the public sector research agencies remain powerful, while the interests of
innovative  enterprises  have  not  yet  been  formed.20 A  central  challenge  for  governance
therefore  is  to  balance  the  supply-side  and  demand-side  interests  in  setting  research
agendas,  including  service  sectors  and  societal  interests  as  well  as  manufacturing  and
agriculture.  Generally,  governments  of  PACs  are  aware  of  the  importance  of  the
involvement  of  industry  in  R&D  and  most  governments  have  developed  policies  that
support  industrial  R&D.  But  industrialists  claim  that  research  priorities  are  defined
without  consultation  and  are  targeted  towards  topics  where  funding  schemes  are
available. Small to medium sized enterprises are also often left out and, although this is a
general problem for all countries, the importance of SMEs in the domestic economy of
candidate countries makes the situation more serious. The voice of societal actors seems
even weaker, and smaller attention is paid to democratic and human needs and to balance
competitiveness against unemployment, inequality, sustainability and risk,  ethics  or  the
place of women in science.

An awareness is emerging of the need to increasing the number of voices that are heard
in the setting of S&T priorities and for new patterns of communication and interaction in
formulating policy, especially at a time of fast technological change and sparse resources.
One sign that this is happening has been the recent growth of interest in foresight studies
as  a  basis  for  strategy  and  policy  planning  activities  of  public  bodies  and  as  tools  for
managing  an  open  process  of  determining  priorities,  to  obtain  maximum  benefit  for
society, sustainable development and competitiveness of the economy (Table 5).

In  Cyprus,  for  example,  foresight  might  centre  on  the  problems  of  reintegration  of  a
divided society outlining the way to build an integrated society based on mutual respect
and co-operation. This implies changes in the education system and economic activities
to achieve a constructive co-operation of the Greek and Turkish communities. Another
important  issue  for  the  foresight  activities  is  developing  a  national  economic  strategy
based  on  strengths  and  traditions,  in  the  context  of  Cyprus’  place  regionally  and  in
Europe.  The  development  of  Cyprus  as  a  regional  portal  of  educational  services  and
research centre is another topic for a future prospective study.

19 National council for S&T policy in Bulgaria, R&D Council in the Czech Republic, Estonian R&D Council, S&T Policy
Council in Hungary, Latvian Council of Science, Malta Council for S&T, Supreme Council for S&T in Turkey
20 Innovation&Technology Transfer, March (2001), http://www.cordis.lu/itt/itt-en/01-2/dossier.htm

26

                                                          
Table 5: National Foresight and planning activities in some PACs

Country Responsible institution

Bulgaria Ministry of regional

development

Ministry of Education,
Czech
Youth and Science
Republic
Hungary Steering Group and

National Committee for
Technological
Development
Latvia Ministry of Economics

Poland Programme management
team (involving members
from Ministry of Science,
Ministry of Economy,
Ministry of Finance,
Ministry of Health,
Ministry of Ecology)
Slovenia Ministry of Economic

Affairs

Mechanism /
method

Panels of
experts, SWOT
analysis, sector
studies

Panels of
experts,

Panels of
experts,
scenarios, Delphi
survey

scenarios,
modelling,
SWOT analysis

Delphi survey,
Panels of experts

direct link
to R&D
policy
no

Time
horizon
(years)

Follow-up
actions / results

2000-2006 National plan for

economic
development

yes

yes

2001-2004 Priorities for

oriented R&D

2000-2020 National

innovation
strategy

no

2003-2025 Macro-economic

yes

no data

development

R&D Technical
Foresight

Panels of experts

yes

2010-2015 National

development
Programme (from
2003)

yes

2003-2023 Policy planning

Turkey Scientific and Technical

Research Council of
Turkey

Delphi,
scenarios, panels

In Estonia foresight is focusing on national issues such as: conservation of environment,
quality of life, ethnic sustainability and regional concerns such as water and air pollution;
energy  production  and  distribution;  transportation  systems;  communication  and
information technologies; bio- and gene engineering; continuous education; distribution
of workplaces throughout the territory of the country. Since Estonia is a small country
those  studies  predominantly  concern  positioning  in  the  international  context  and  with
respect to neighbouring countries.

In  Bulgaria  there  is  no  formalised  Foresight  study  taking  place,  but  the  Ministry  of
Regional Development is orchestrating a panel of experts, undertaking a SWOT analysis
and a sectoral study to feed in the National plan for economic development (2000-2006).
This activity is like a mini-Foresight process, since it uses prospective techniques and it is
organised  in  a  participative  manner  with  the  active  participation  of  the  relevant
stakeholders.

Possibly  the best practice in the PAC  context is  the  Hungarian Foresight  Program  –
which  has  been  the  first  foresight  program  in  Central  and  Eastern  Europe  launched  in
1997. The main aim of the Program was to bring together business, the science base and
government  to  analyse  the  trends  in  technological  development;  world  market
opportunities;  strengths  and  weaknesses  of  the  Hungarian  economy  and  R&D  system,
and on this basis of the Foresight outcomes to elaborate a national innovation strategy.

27

Another goal was to join  intellectual  forces of Hungarian researchers, business people,
and  government  officials  to  discuss  on  current  and  future  competitive  position  of
Hungary in a  globalised market.  In the  Program  strong  emphasis  is  given  on  scenario-
building  at  macro-level  and  panel  levels,  as  well  as  regional  scenarios  related  to  the
development of the Central and Eastern European region.

Need for better investment in research

As  a  result  of  the  lack  of  co-ordination  between  agencies  and  instruments,  almost  all
PACs show signs that funding mechanisms are not meeting targets or fail to provide the
correct  incentives  for  companies  to  innovate.  For  example,  rules  attached  to  loans  for
industrial  R&D  may  mean  that  only  larger  firms  with  low-risk  projects  can  apply.
Moreover, it has been hard for decision-makers in PACs to focus on measures to support
the creation of innovative start-up firms at a time when many of the largest employers
were going bankrupt. The need to deal rapidly with a large number of urgent legislative
and policy  changes,  such  as  carrying  out  comprehensive  health and  social  reforms  has
made  it  hard  for  PACs  emphasise  the  apparent  luxury  of  building  a  knowledge-based
society.  Although the investments in education and research may  give a  higher  rate  of
return21 than public welfare spending or infrastructure development, the available funds
for R&D are very limited and a serious decline of the R&D budgets in the transitional
period have been observed in all CEECs. The position now in most PACs, is that gross
domestic  expenditure  on  R&D  (GERD)  is  significantly  below  the  EU15  average  of
around 2% (Figure 3). A cluster of PACs achieve roughly equivalent levels to some EU
member states at around but mostly below 1.5% (Slovenia, Czech Republic, Slovakia).
Then there is a cluster from about 0.8% to 0.4% (Poland, Hungary, Romania,  Estonia,
Bulgaria, Latvia, Lithuania and Turkey) followed by Cyprus at 0.2%.

Figure 3: GERD as % of GDP

3

2.5

2

1.5

1

0.5

0

Cyprus

Czech Republic
Bulgaria

Estonia

Hungary

Latvia

Lithuania

Poland

Romania

Slovakia

Slovenia

Turkey

EU-15

Finland

Portugal

US

Source: Eurostat, National sources for Turkey 

1995

1997

1998

In addition, appraisals of the effectiveness of innovation instruments are scattered, only
Hungary undertakes systematic evaluations of programmes funded in favour of applied
R&D programmes involving experts of the EU.

21 OECD (1998 )

28

                                                          
Financial mechanisms and tools

In order to  promote  S&T,  innovation  and SMEs,  a  large  number  of  funding  institutions,
both  state-run  and  private,  have  been  established  in  candidate  countries  (see  Table  4).
Similarity in the practice prevails in PACs for distribution of the limited financial resources
using  as  main  instruments  subsidies,  thematic  grants  and  grants  for  projects.  A  common
feature  is  the  use  of  competitions  to  award  finance  for  new  R&D  projects  relating  to
national policy objectives and priorities. It is becoming less common that money is directly
earmarked  to  research  units  in  the  form  of  fixed  institutional  budgets.  Even  so  funding
systems are poorly configured due to the lack of active restructuring policies regarding the
R&D sector, poor clarity of methods for establishing priorities and criteria for funding, as
well as the absence of monitoring and evaluation of the research results. At the moment the
situation is more a matter of islands of best practice and generalised good intentions (Box
2).

Box 2: Examples of good practice related to the funding of R&D

In Hungary22 the following main funds have been set up to allocate grants or favourable loans:
•  Higher Education Development Fund - to finance the development of the infrastructure of  higher

education;

•  National Scientific Research Fund - to finance basic research;
•  Central Technological Development Fund - to promote technological development;
•  “Szechenyi  Plan”  funding  scheme  -  a  relatively  new  funding  scheme,  supporting  exclusively

business-academy collaborations.

Grants  or  favourable  loans  are  available  for  practically  all  Hungarian  researchers  or  organisations
(firms, university departments, other R&D units) awarded through three main schemes:
•  R&D  infrastructure  projects  -  a  ‘bottom-up’  scheme  introduced  in  1991  with  major  goals:  to
upgrade the R&D and educational infrastructure (e.g. to provide grants to purchase PCs and various
tools); to facilitate the dissemination of R&D results (e.g. grants to attend conferences abroad if the
applicant’s paper is accepted, and contribution to organise conferences in Hungary);

•  Applied R&D projects – another ‘bottom-up’ scheme, also introduced in 1991. Project proposals
are evaluated by independent technical and  financial experts in three stages and in  most cases an
interest-free loan is provided;

•  Target-oriented national projects - a ‘top-down’ scheme, introduced in 1992. Four major goals
are selected for support from public funds: disposal of  nuclear  waste, development of  geographic
information  systems,  food processing and packaging  technologies  and  machinery  and  automotive
technologies.

In Slovenia23 the priorities of the S&T policy (2001-2002) are defined in the Budget Memorandum
and the main instruments of the policy are:
• 
• 

(co-)financing of basic and applied research projects / programmes;
public research institutions (co-financing of fixed cost of public research institutions and research

institutions within both universities);

• 

international  co-operation  in  the  field  of  science  and  research  (co-financing  of  bilateral  and
multilateral  research  projects,  international  commitments,  international  promotion  of  Slovenian
science);

•  Young Researchers Programme (financing of young researchers);
• 

(co-)financing  of  research  infrastructure  (research  equipment,  instrumental  centres,  scientific

information and communications);

•  financing of expert system (evaluations, reviews etc.).

22 Based on Havas (1999) and additional data provided by Lajos Nyiri and Bálint Dömölki - Panel members
23 Boris Pukl, Panel member

29

                                                          
Monitoring and evaluation of S&T performance

The  regular  monitoring  of  the  research,  development  and  innovation  (RDI)  system
performance and the inventory of available resources is a foundation to the determining
S&T objectives and to the proper functioning of the whole system. Monitoring systems
are essential to achieve and understand the performance of RDI systems and for adjusting
policies. In many candidate countries there are not reliable data on input (funding) and
outputs (economic performance) of the RDI systems.

Monitoring and evaluation of S&T in candidate countries is not systematically organised
in comparison to EU  countries  and  actions  are  needed  to  strengthen  this  aspect.  Some
countries are starting considering monitoring systems as important tools for better S&T
performance (see Box 3).

In general, however, candidate countries depend on external consultancy to monitor and
evaluate their S&T programmes and outcomes. In addition, monitoring is frequently done
on an ad hoc basis at project-level. There is the need to create an internal capacity in these
countries in order to have continuously available monitoring and evaluation of the public
R&D.  The  lack  of  monitoring  means  that  in  is  unknown  how  the  BERD  indicator  is
developing.  Evaluation  systems  are  required  for  the  development  and  continuous
improvement of policy and the adjustment of policy tools.

There  is  the  need  to  implement  a  system  in  all  candidate  countries  that  uses  more
systematically  indicators  to  assess  the  performance  of  R&D  and  models  for  quality
evaluation  of  research  outcomes.  Benchmarking  should  be  organised  considering
European  average  level,  but also other countries like United States,  and  non-European
countries.

Box  3:  A  monitoring  system  to  follow  and  evaluate  the  actions  in  the  National  Strategy  for
Technology Development and Innovation

A monitoring system to follow and evaluate the action in the National Strategy for Technology
Development and Innovation could have the following objectives:
•  To  define  benchmarks  which  will  provide  realistic  targets  for  the  implementation  of  the

Strategy

•  To develop a set of indicators against which progress on implementation of the Strategy will be

measured

•  To choose a method for collecting information on the agreed indicators

The  implementation  of  the  National  Strategy  for  Technology  Development  and  Innovation
should  lead  to  beneficial  results  for  the  country  as  a  whole  in  terms  of  improvement  of  the
national research and innovation capacity and performance. A set of indicators will be developed
against  which  the  innovation  performance  of  the  country  will  be  measured.  A  possible  set  of
indicators  might  include  physical  indicators,  impact  indicators,  performance  indicators  and
financial indicators:
•  physical indicators to measure data such as infrastructure provision
•  impact  indicators  to  measure  the  impact  of  activities  in  support  of  technology  development

and innovation

•  performance indicators to measure the results obtained in terms of objectives
•  financial indicators to measure the amount of investments to improve the national innovation

system

(Zoya Damyanova, Panel member)

30

Future directions for S&T policy

A clear challenge for the coming years is to rationalise and co-ordinate diverse initiatives
currently  taken  by  various  ministries  to  promote  industrial  R&D,  innovation  and
technological development. This could be supported by the professionalisation  of  S&T
monitoring  and  evaluation  in  the  form  of  innovation  policy  units.  They  would  be
responsible  to  assess  the  performance  of  current  instruments  and  structures  promoting
innovation or technological development, using tools such as:

•  evaluation and monitoring systems – to measure the effects of R&D investments,
to enable policy makers to monitor industrial R&D and their use of public R&D

•  unified set of indicators
• 

tools/  instruments  used  in  PACs  for  elaboration/  implementation  of  priorities,
development of knowledge infrastructure, learning capabilities

•  benchmarking, best practice, impact assessment, transparency of criteria, audit

But the fundamental issue  is  the  need  for  co-operation  of  the  widest  possible  group  of
stakeholders (within and among sectors and regions) in preparing long-term innovation
strategies and the introduction of various policy measures and instruments. A focus  on
nurturing foresight activities is a move in this direction.  And, although the first steps to
carry out prospective studies (in Hungary, Poland, Czech Republic) have been taken in
PACs,  there  is  still  a  need  for  wide  acceptance  in  PACs  of  the  role  of  foresight  to
systematise the debate at national level on future prospects and desires related to socio-
economic and technological evolution in medium and long terms.

Such  developments  are  particularly  promising  in  that  they  address  actors  outside  the
confines of scientific interests and expert groups. In the most extended cases they avail
themselves of a complete range of horizontal communication possibilities. For instance,
there is increasing on-line access to local and national information systems in the area of
S&T, to the results of research projects and programmes, to science museums, to science
festivals and to citizens’ juries. All such channels could contribute to the transparency of
the  research  activities  and  facilitate  the  communications  of  all  actors  involved  and
improve the performance of the whole RDI system.

Such  openness  provides  the  basis  for  a  much  broader  look  at  science,  in  particular
focusing on cultural identity and democratisation of science. The development of PAC
governance systems takes place at a time when there is a recognised need for a change of
image  of  S&T  and  the  perception  of  science  in  society  has  been  also  stressed,  in
particular the popularisation of science between people and how it could help them. Such
approaches  should  eventually  allow  a  more  balanced  and  legitimate  system  of  priority
setting.

The  present  trends  in  PACs  suggest  that  efforts  are  needed  to  confine  public  and
private  S&T  ambitions  to  what  is  really  achievable.  The  gap  has  to  be  closed
between  political  rhetoric  and  action,  effort  and  outcomes.  Unfortunately  there  are
often  big  gaps  between  national  S&T  targets  and  the  level  of  resources  provided.
These  gaps  arise  as  a  result  of  a  combination  of  too  many  competing  calls  on
political  agendas,  administrative  shortfalls  and  genuine  lack  of  resources,  all  of
which  point  to  systemic  and  institutional  problems  of  one  sort  or  another.  Proper
policy  co-ordination  and  implementation,  greater  transparency  of  S&T  governance
and more effective monitoring and evaluation can help to improve the efficiency of

31

actions.  On  the  other  hand,  there  is  a  need  for  more  holistic  approach  on  R&D  –
amounts spent on R&D are not as important as the kind of research on the way.

The  measures  already  undertaken  for  financing  and  promoting  research  and
innovation outline the common perception in PACs of the future importance of S&T
in the society, for growth and employment. However, there are some doubts related
to  the  efficiency  of  the  financial  instruments  and  mechanisms  used  and  their  real
contribution to S&T development. A  challenge for  PACs,  therefore,  is  to  establish
an  effective  and  transparent  distribution  mechanism  of  the  limited  financial
resources available for research, according to national interests and priorities. Better
investments  in  research  require  fair  and  open  competition  for  funding  based  on
relevance and excellence using objective and transparent criteria.

At the same time it is essential to consider how to preserve the fundamental research
traditions  while  pushing  competitive  funding  schemes.  In  PACs,  where  an  active
national  and  regional  S&T  policy  is  absent,  and  the  state  support  for  research  is
limited,  the  excellence  in  science  and  technology  will  increasingly  rely  upon
competitive application for funding  by  international  sources (inside consortia  or  as
part of international projects). The participation in international programmes allows
prominent researchers to obtain the necessary technology and financial resources, as
well as to increase their scientific knowledge  and experience. Also,  a Europe-wide
dialogue  with  the  private  sector24,  in  particular  multinationals  that  are  investing  in
PACs,  might  help  to  build  the  industrial  component  of  research  in  candidate
countries.

24 Bálint Dömölki, Panel Member

32

                                                          
Chapter 2
Knowledge institutions and capacities

2.1 Towards a new knowledge infrastructure

Introduction

For pre-accession countries the transition to a knowledge-based economy and society is
essential for their full integration into the 'European' economic area and society. The need
for higher economic growth, competitiveness and sustainable development puts a special
emphasis on the knowledge infrastructure in these countries - the aim of this chapter is to
outline the tasks related to its future development. We concentrate on the following:

system building and institutional interactions

• 
•  knowledge and technology diffusion
•  personnel mobility as the main source of tacit knowledge dissemination.

The knowledge-infrastructure analysis in  the first  section focuses on  the main building
blocks  of  the  Research,  Development  and  Innovation  (RDI)  system  –  research  units
(research institutes, public laboratories), universities (and other educational and training
institutions),  enterprises  (branch  and  industrial  R&D)  and  intermediaries  (bridging
institutions,  technology  transfer  organisations,  patent  offices),  and  the  links  between
them.  The  building  of  a  more  effective  and  efficient  knowledge  infrastructure  in
candidate countries is seen in terms of the requirements for:

•  a coherent R&D and innovation system;
• 
strengthened partnerships between research, universities and industry;
•  new infrastructure and intermediaries to facilitate technology transfer;
•  emergence of relevant knowledge intensive services; and
• 

increased openness to international networking.

In  analysing  recent  knowledge  infrastructure  developments  in  candidate  countries,
this  section  seeks  signs  of  emerging  models  of  research  in  PACs  and  of  future
knowledge institutions.

The system of research and innovation

In  the  past,  the  R&D  systems  in  CEECs  were  characterised  by  three  types  of
institutions – academies of sciences, institutions for higher education, and industrial
branch research institutes. During the transition period, different countries followed
different  restructuring  strategies  (Box  4),  though  with  almost  all  branch  institutes
being  heavily  affected  and  a  large  number  of  them  being  closed.  The  process  of
transformation has followed three phases25:

•  dissolution and fragmentation of the old S&T systems;
•  restructuring, consolidation of institutions, emergence of new organisations;
•  building of a new innovation system through integration and networking.

25 Meske (2000)

33

                                                          
Box 4: Approaches for the restructuring of the R&D system
The patterns of restructuring of the science base have been quite different from place to place26.
Candidate countries focused at different stages of the transition on organisational, functional and
financial aspects of the R&D system and often introduced temporary incompatible changes27. A
few  countries  engaged  in  an  active  restructuring,  such  as  Estonia  and  Latvia  with  attempts  to
ease the process of change with legislative measures, co-funding, innovation policies, etc. Some
CEECs, such as the Czech Republic, allowed industrial research to suffer the shock of a rapid
transition  to  a  private  sector  model.  Probably  the  most  common  approach,  such  as  in  Poland,
Romania, Lithuania and Bulgaria, was to let the research institutes struggle along with reduced
public funding and state contracts but no active support to restructure.
The Latvian approach28 in restructuring R&D is based on the integration of the national research
potential  into  universities  with  the  aim  of  modernising  the  universities  and  strengthening  their
research  capacity.  Research  centres  of  national  significance  have  been  established,  selected
using the following criteria:
•  high international recognition;
•  consistency with national research priorities;
•  well developed international collaboration in research and training;
•  advanced and innovative performance.

In the Czech Republic, in comparison, no structural policy was carried out at a microeconomic
level  within  the  R&D  system.29  The  government  had  withdrawn  financial  support  from  the
majority of industrial  R&D institutes at an early  stage in the transition process and during the
privatisation  they  were  treated  as  ‘normal’  production  enterprises.  This  shock  without  therapy
led to the conversion of the institutes R&D activities into production and services. Business is
by  far  the  largest  contributor  and  the  largest  recipient  of  research  and  development  funding,
employing more than the half of all researchers.

In  Poland  during  the  transformation  period  a  gradual  restructuring  policy  was  followed,
changing the public funding principles and ranking of institutes. However, the R&D system in
general has retained the main features and structures of the previous system and a large number
of R&D institutes still receive subsidies.30

Due to the lack of an active restructuring policy in Lithuania, some industry-oriented research
institutes  moved  from  basic  to  applied  research  and  created  companies  in  their  area  of
specialisation.  At  present,  it  is  considered  that  industrial  R&D  in  Lithuania  is  substantial  and
directed  to  innovation,  based  mainly  on  own  R&D  resources  of  companies,  using  human
resources of former research institutes31.

National  circumstances  differ,  but  most  of  the  candidate  countries  have  completed
the  first  two  phases  with  the  third  phase  still  lying  ahead.  Although  the  S&T
development  in  the  Mediterranean  countries  has  followed  a  different  path,  these
countries are  also  focusing on the  establishment of  a  coherent  RDI  system  and  the
use  of  the  potential  of  technology  and  innovation  for  economic  growth  and
sustainable development.

Recent  data  giving  an  aggregate  comparison  between  some  PACs  and  current  EU
members paint a positive picture, suggesting that the PACs have the potential to sustain
high-level  research  systems,  at  least  on  a  par  with  several  current  EU  Member  States
(Figure 4).32 The same report gives further figures on investment in technology creation

26 see Meske, (2000); Dyker et al. (1999)
27 Radosevic (1999)
28 Sylins (1999)
29 European Commission DG Enterprise (2001)
30 European Trend chart of innovation, Country reports: Poland (2000), http://trendchart.cordis.lu
31 European Commission DG Research (1999)
32  The  UNDP’s  technology  achievement  index  aims  to  capture  how  well  a  country  is  creating  and  diffusing  technology  and
building a human skill base - reflecting its capacity to participate in technological innovations of the network age. This index is a
composite of four dimensions including technology creation (patents granted to residents; receipts of royalties & license fees),

34

                                                          
where  data  for  the  PACs  are  compared  with  three  Member  States  (Italy,  Greece  and
Portugal) and the average for high-income OECD members.33 This shows the relatively
low  levels  of  R&D  investments  even  if  in  some  cases  it  surpasses  some  current  EU
Member States. However, while such data certainly do give grounds for hope, it would
be  premature  to  assume  that  much  of  the  work  of  reconstructing  the  knowledge
infrastructure has been done.

Figure 4: Comparison of PAC and EU States' Technology Achievement 

Romania 
Cyprus 

Poland 
Bulgaria
Portugal

Greece

Slovakia

Slovenia
Hungary
Czech Republic
Italy

Spain

France

Austria

Belgium
Ireland

Germany
UK

Netherlands

Sweden

Finland

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

Technology Achievement Index

The main problems relate now in all PACs to the fragmentation of the RDI system, based
on  the  lack  of  co-ordination  and  interaction  between  the  main  actors,  and  thus  its
inefficiency34. As pointed out in the first chapter, science and research, and technology
and innovation are not considered in their integrity. Only in few countries like Romania
and Turkey a separate public body has responsibilities for both, innovation and research.
Furthermore, the fast changes during the last decade do not facilitate the integration of all
actors  of  the  RDI  system.  Therefore,  a  closer  look  is  needed  to  outline  the  challenges
which relate to:

•  the interactions between research institutes and enterprises
•  the links between universities and industry
•  the emergence of bridging organisations and new players.

diffusion of recent innovations (internet hosts; high & medium tech. exports), diffusion of old innovations (telephones, electricity
consumption)  and  human  skills  (years  of  schooling;  output  level  of  skills  &  qualification,  tertiary  professional  and  scientific
education enrolment and graduates’ ratio). UNDP (2001)
33  The  relatively  high  number  of  scientists  and  engineers  in  R&D  does  not  appear  to  be  consistent  with  the  acknowledged
collapse  of  applied  research,  but  then  it  may  well  be  that  many  of  these  high  numbers  reflect  scientists  and  engineers  still  in
academic positions in Universities and academies of science.
34 European Commission DG Research (1999)

35

                                                                                                                                                                     
Research-industry interactions

Breaking with the state control of the past, R&D institutions in CEECs are considered to
be  now  self-governing  and  autonomous,  open  to  international  collaboration.  However,
the  decline  of  financial  support  by  the  state  and  the  inability  to  attract  other  funding
confront most of them with  growing  problems  of preserving  their  research capabilities
and carrying out world-class research. The passive policy of some governments towards
restructuring of the academic institutes has the transitory advantage of preserving some
jobs.  But,  the  stagnation  of  research  capabilities  might  have  much  bigger  long-term
consequences.

Although  widely  discussed  in  policy  documents,  the  need  for  enterprises  to  establish
closer  co-operation  with  research  units  and  to  increase  their  research  expenditure,
practical results are still low. Business investment in research is generally lower than the
EU15  (Figure  5).  Some  remarkable  exceptions  include  Romania,  Slovenia,  Czech
Republic and Slovakia where industrial R&D expenditure is comparable to the level in
EU  members.  But  elsewhere,  the  industrial  contribution  seems  very  low.  However,  a
question exists as to whether the statistical data really reflect the situation, and whether
the companies, in particular SMEs, are motivated to report any costs made for research
rather  than  just  as  product  costs35.  The  low  quality  of  data  for  industrial  research  and
innovation  makes  it  very  difficult  to  assess  the  situation  as  regards  the  financing  of
industrial innovation and therefore to identify appropriate steps to improve the situation.
The different pace of privatisation also needs to be taken into account and the level of
contribution of state-owned companies to research.

Figure 5: GERD financed by industry (in %)

90

80

70

60

50

40

30

20

10

0

Czech Republic
Bulgaria

Estonia

Hungary

Latvia

Lithuania

Poland

Romania

Slovakia

Slovenia

Turkey

EU-15

Finland

Italy

Portugal

Japan

US

Source: Eurostat, OECD, National sources of Turkey

1995

1997

1998

The  history  of  central  planning  in  CEECs  and  the  reliance  on  public  funding  sources
have  inhibited  the  growth  of  business-research  linkages,  and  this  contributes  to  the
difficulties that public research institutes face  today.  In Poland, for  example,  industrial
research has played only a minor role in the institutes of the Polish Academy of Sciences.
These have  focused  mainly  on  scientific  collaboration  with  other  research  institutes  in
basic science. Specialised R&D units in Poland have relatively better interactions with
industry, mainly in technology and product development, but even here passivity rules36.

35 Bálint Dömölki, Panel Member
36 Jasinski (1997)

36

                                                          
Branch research institutes had stronger and more differentiated interactions with industry
in  the  past.  But  with  the  cutting  of  state  support  and  drying  up  of  industrial  funding
during  the  restructuring,  they  have  had  severe  difficulties  to  retain  professional
equipment and their best staff. Their inability to finance longer-term research and their
present focus on short-term services, as well as the lack of consultation with industry on
choosing industry relevant research topics, might further limit the establishment of closer
collaboration.

The insufficient industry-research links relate also to a lack of demand by industry for the
services that domestic research units can offer. Independent major companies frequently
disappear after privatisation and become either subsidiaries of multinational corporations
or  their  specialised  suppliers  or  service  providers,  which  little  exploit  local  research
expertise.  On  the  other  hand,  competition  is  driving  domestic  enterprises  to  apply
advanced research results. Despite the high costs of the services of private commercial
firms  and  foreign  consultants,  domestic  companies  in  Hungary,  for  example,  rely  on
collaboration  with  foreign  laboratories  for  quality  upgrading  activities,  product
development  and  testing37.  There  are  some  grounds  for  hope.  The  traditional
collaboration  with  domestic  partners  may  be  re-established  if  they  overcome  the
problems  of  understanding  the  real  industrial  needs  and  improve  the  quality  of  their
services. Companies appreciate the value of individual researchers and prefer to hire their
services on part-time basis, rather than to establish co-operation agreements with R&D
institutes38. Some domestic enterprises continue to rely on their own research capacities
in engineering, product development and design.

University-industry links

Due to the role of the universities as educational and training centres preparing the
future high-skilled workforce, the impact of transition has been not as acute as in the
research  units.  The  new  framework  for  education  in  CEECs  has  facilitated  the
establishment of private universities, many of them specialised in domains relevant
to  economic  needs.  Moreover,  the  development  of  more  open  and  internationally
integrated higher education has been initiated (see Chapter 3).

Economic  expansion  has  fostered  the  re-establishment  of  industry-university  links,
focused  on  training  high-skilled  specialists  and  managers.  In  most  PACs  the
interaction between industry and higher education establishments has been extended
from  what  was  originally  limited  to  sponsorship  to  closer  collaboration  in
developing joint courses and programmes, training materials, on-the-job-training of
students,  as  well  as  carrying  out  research.  These  types  of  initiatives  are  creating  a
positive feedback, in that industries are beginning to sponsor the education of future
employees.  Moreover,  the  on-going  collaboration  in  setting-up  laboratories  and
technology  centres  at  universities  is  likely  to  continue  and  deepen  industry-
university interactions also in research (Box 5).

Universities  have developed as important  centres  for  both,  research  and  education.
They  seem  to  be  a  preferred  partner  for  the  industry  for  carrying  out  contract
research.  In  particular,  some  technical  universities  (e.g.  in  Hungary,  Bulgaria,
Estonia)  have  long  traditions  in  this  area  and  are  on  the  way  to  re-establish  and
widen this type  of  activity.  In  Hungary  different  foreign  companies  (e.g.  Ericsson,

37 Romijn (1998)
38 Howell et al. (2000)

37

                                                          
Nokia, Sony, Knorr-Bremse) are involved in joined activities in research labs at the
Budapest  Technical  University  in  telecommunications,  electronics  and  automotive
engineering.

Box 5: University centre of research

In  Estonia  the  integration  of  research  at  university  has  significantly  strengthened  the  research
capacities and intellectual resources of the universities. The Tallinn Technical University (TTU) has
combined bottom-up and top-down approaches in extending its industry relations.

For  several  years  now  TTU  has  carried  out  contract  research  on  behalf  of  large  infrastructure
companies  in  the  areas  of  electricity  production  and  distribution  and  oil  shale  mining,  as  well  as
with  manufacturing  companies  in  the  fields  of  signal  processing,  electrical  equipment  and  power
electronics, automotive industry, etc. In the field of telecommunication, TTU has started long-term
co-operation  with  the  Estonian  Mobile  Telephone  Company  and  Ericsson  Eesti  AS.,  launching  a
testing  and  training  laboratory.  The  co-operation  of  TTU  in  chemical  technologies  with  a
manufacturer  of  rare  earth  metals  (AS  Silmet  Grupp)  includes  mainly  technical  consultation  and
technical  information  exchange,  but  is  expected  to  be  extended  to  contract  research  in  coming
years.

In  addition  to  contracts  with  local  companies  TTU  performs  contract  research  for  foreign
companies  as  well.  Current  contracts  include  large  multinational  concerns  (like  Nokia),  but  also
small  companies  (Fincitec  in  Finland)  and  ranges  from  sectors  such  as  chemical  technologies,
material technologies to information technologies and telecommunications.

Considering  the  important  role  of  competence  centres  and  innovation  support  structures  for
knowledge transfer, a Tallinn Technical University Innovation Centre Foundation was founded in
1998 to connect R&D data of the TTU with technological needs of industrial enterprises.

The range of activities of TTU will be extended with the establishment of a graduate school. This
will  contribute  to  the  concentration  of  the  existing  resources  and  the  improvement  of  research
training.

(Rein Küttner, Panel member)

Universities  have  formed  their  own  centres  for  co-operation  with  industry.  The
flexibility  of  university  management  and  their  self-governance  facilitate  the
establishment  of  spin-off  firms  for  commercialisation  of  research  results.  The
involvement of some universities39 in shared activities with the newly created spin-
off  firms  -  e.g.  the  participation  of  professors  in  business  activities  and  the
engagement  of  students  as  trainees  and  workers  -  is  fostering  research-industry
relations, as well as the further development of applied research in PACs.

Building bridges

At institutional level, one of the obvious challenges for building a coherent RDI system
relates to the linking of R&D institutes, universities and industry. The teaching activities
of researchers, both at universities and at research units, the involvement of professors in
research projects, collaboration in scientific events and programmes are part of the new
type of co-operation pattern in the RDI system. However, these interactions are mainly at
individual level without establishing tighter institutional links (except where the research
institutions have been integrated into universities following an active R&D restructuring
policy).

39 e.g. Tartu University and Tallinn Technical University in Estonia, Warsaw Technical University

38

                                                          
The need for building bridges between research and industry has led during the past
few years to the emergence of a range of new institutional structures (state or private
supported bridging elements) in most pre-accession countries:

•  infrastructure units (parks, incubators);
•  organisations  for  innovation  support  of  a  'consultant'  character  (innovation
relay  centres,  Euro-info  centres,  technological  centres,  specialised  consulting
companies, foundations).

Set  up  by  government  bodies,  researchers  or  non-governmental  organisations
(NGOs),  the  new  intermediaries  represent  an  enormous  concerted  attempt  to
establish new models of co-operation between business and research. The activities
of the intermediaries cover a wide range of knowledge-intensive services – provision
of  information  and  advice,  ICT  support,  organisation  of  training  programmes,
assistance  for  finding  partners  and  joint  projects,  dissemination  of  advanced
technologies,  channelling  innovative  ideas  &  inventions  and  support  in  the
protection  of  intellectual  property.  However,  the  development  of  intermediaries  is
heavily dependent on existing financial resources. After the end of the initial public
or international funding, a number of them face the  dilemma how to survive in the
market-driven environment.

Box 6: Intermeddiary to support applied research

The Technology Development Foundation of Turkey40 has been established by the collaboration of
private and public sectors in 1991. The assets of the Foundation are donated by the  founders and
some obtained through the Loan Agreement between Word Bank and Turkey. In the management
of the Foundation senior representatives of the Treasury and Foreign Trade and the Scientific and
Technical Research Council of Turkey (TUBITAK) are involved. The aims of the Foundation are:

• 

• 

• 

• 

to  encourage  Turkish  industry  to  increase  in  real  terms  its  investments  in  research  and
development and to carry out all activities in accordance with the requirements.
to  provide  funds  and  expertise  supportive  of  industrial  technology  projects  to  enhance
technology and technological infrastructure.
to identify technological research areas and carry out research and projects in such areas alone
or  by  contract  to  bridge  the  technology  gap  between  Turkey  and  other  nations  and
strengthening Turkey’s position in some global trade sectors.
to strength the ties between Turkish industry and higher education institutions, TUBITAK and
other public and private research organizations.

(Dilek Cetindamar, Panel Member)

A growing number of new players, e.g. foundations, industrial associations, chambers of
commerce,  NGOs,  are  supporting  research  and  innovation  in  PACs  (Box  6).  Most  of
them  have  an  active  intermediary  role  between  the  institutions  governing  the  RDI
system,  the  small  and  large  companies  and  the  research  units.  Some  are  going  also
further – providing knowledge-intensive services and/or trying to solve applied research
problems,  and,  in  particular,  focusing  on  the  socio-economic  demands  for  research.
Through their efforts at networking, these actors are quickly able to build research teams
on  demand.  The  flexibility  for  building  multidisciplinary  teams,  involving  prominent
researchers,  engineers,  lawyers,  entrepreneurs,  etc.  in  a  particular  project,  maximises
their chances of success in the dynamic changing environment and in the competition for
research and innovation funding.

40 see also http://www.ttgv.org.tr/eng/eng_main.html

39

                                                          
The  extension  and  building  of  further  research  capacities  in  many  candidate  countries
occurs via the establishment of centres of excellence or centres of competence, in some
cases at universities, in others at strong research institutes or newly established bodies.
As  discussed  in  the  first  chapter,  international  co-operation  within  the  EU  Fifth
framework programme has fostered the emergence of a number of centres of excellence
in all candidate countries. The European Research Area provides also for development of
centres  of  excellence  at  national  level  and  positioning  them  within  a  single  European
network  -  fostering  high-level  research  and  more  efficient  deployment  of  the  limited
human and financial resources for obtaining new technological  solutions and  scientific
achievements.  At  national  level,  the  emerging  centres  rely  on  existing  and  potential
capacity.  The establishment  of a pool  of R&D competence to  respond to  the  needs  of
research by industry, as well as the support of the scientific community, industry and the
state to these structures is facilitating their growth as attraction poles for research in the
respective areas. Of particular importance is their strong international collaboration with
researchers in the same area for establishing pan-European excellence in research.

Future models of research

Concerted  actions  of  all  stakeholders  in  PACs,  e.g.  policy  makers,  industrialists,
researchers, professors, NGOs, are needed to build a coherent RDI system in which
the  institutional  base  is  densely  interconnected.  In  this  period  of  structural  change
there  is  a  widely  accepted  need  to  create  a  favourable  environment  and  foster
effective  communication  between  the  major  actors  in  the  system.  Bridging
organisations are  part of the solution,  but  they  do  not  substitute  the  need  for  intra-
organisational  restructuring.  Bridging  functions  are  most  likely  to  work  as
complementary  functions  to  restructured  enterprises,  universities,  R&D  service
companies.  The  survival  of  bridging  organisations  will  require  them  to  develop  a
sustainable  business  model,  perhaps  as  SMEs,  with  their  own  specific  in-house
capabilities, including knowledge transfer capabilities.41

At this stage, when old and new structures exist in parallel, it is still uncertain what
model  for  the  development  of  research  candidate  countries  will  follow.  There  are
real opportunities for PACs to leapfrog ahead towards the setting up of new types of
research interactions, more appropriate for the demands of the knowledge society. If
we  consider  the  present  trends,  some  important  models  for  research  could  be
assumed for candidate countries:

1. Economic  modernisation  is  driving  new  industry-university  links  focused  on
building  the  future  knowledgeable  workforce.  This  provides  an  entry  point  for
university-based laboratories and technology centres engaged in industrial support
for  applied  research.  Universities  also  may  attract  industrial  researchers  as  part-
time professors. Personal links between supervisors and graduate researchers who
then go on to work in industry will also help. Finally, the good facilities in some
universities, in particular high-speed Internet and modernised technology basis of
laboratories,  are  likely  to  support  their  claim  as  to  be  centres  of  research  in  the
future.

41 Dyker et al (1999)

40

                                                          
2. Centres  of  excellence  are  emerging  outside  of  the  universities  characterised  by
strong  research  teams,  young  researchers,  dynamic  professors  and  close  links  to
industrialists. These centres of excellence provide a creative environment for basic
research  and  generation  of  new  ideas  and  innovation.  Most  of  them  have  been
established  within  EU  programmes  for  research  and  therefore  are  dependent  on
international  funding  and  the  question  is  to  what  extent  they  can  be  developed
further  as  centres  of  national  strategic  value.  Recognition  of  this  possibility  by
local  public  and  private  stakeholders  is  especially  important  for  this  prospect  to
pan out.

3. International  and  regional  networking  is  increasingly  becoming  an  essential
means  of  staying  abreast  of  research  developments  and  acquiring  expertise.
Support  for  common  projects  with  foreign  partners  can  contribute  to  profiling
areas  of  excellence  and  competence  and  could  lead  to  the  establishment  of
regional multinational research centres with international teams actually based in
PAC laboratories.

2.2 Technology transfer and innovation

Introduction

Knowledge  is  a  driving  force  of  economic  growth  and  societal  development  -  but
only  when  it  is  successfully  put  into  practical  application.  Thus  innovation  has
become an important policy theme for Europe from the Green Paper on Innovation42
to  the  Lisbon  summit  of  the  European  Council  (March  2000),  which  set  the  goal
Europe to become “the most competitive and dynamic knowledge-based economy."

In  the  process  of  developing  market  economy  and  meeting  the  objectives  of  the
accession  to  the  EU,  innovation  and  technology  transfer  are  likewise  essential  for
industrial  competitiveness  and  market  growth  in  PACs.  To  catch-up  rapidly  PACs
have to establish frameworks conducive to innovation, support innovative firms and
foster  a  culture  of  entrepreneurship.  While  the  previous  section  has  focused
predominantly on the institutions within the  knowledge  infrastructure  and the  links
between  them,  the  aim  of  this  section  is  to  outline  the  main  mechanisms  for
technology transfer and innovation in candidate countries.

Knowledge and technology flows

The  process  of  economic  transformation  in  CEECs  had  many  consequences  for
domestic  enterprises.  The  opening  of  the  market  to  competition,  privatisation,  the
collapse of the traditional export market in Eastern Europe and the disappearance of
state  support,  have  constituted  a  dramatic  shift  in  the  business  environment.  The
increased  competition  after  the  liberalisation,  along  with  the  disintegration  of  the
state distribution and marketing network and the decline of customer demand, have
caused  a  number  of  domestic  companies  to  lose  their  place  in  the  market  -  many
have  gone  bankrupt.  The  survival  of  companies  has  been  highly  dependent  on  the
speed  of  change  in  their  productivity  and  competitiveness.  The  access  to  new

42 COM(95)688 final

41

                                                          
technologies  followed  by  fast  acquisition  and  application  has  been  the  most
successful strategy for enterprises.

The main mechanisms for technology transfer in PACs are mostly indirect such as:

• 

• 

inward transfer of ‘hard’ (product, process) or ‘soft’ (management) technology,
mainly by foreign direct investment;
integration  of 
international  production  chain  by
the 
into 
subcontracting, outsourced assembly processes, provision of distribution services,
reverse engineering of products and/or customised production and design;
•  co-operative industrial alliances with foreign partners and learning-by-trading.

local  firms 

Direct technology transfer is limited to interchange of personnel (spin-offs from research
units or researcher-led start-ups) and is rather small scale. What seem to be lacking are
effective stimulants to attract significant levels of corporate investment in R&D.

Inward technology transfer

Foreign  direct  investment  (FDI)  offers  the  prospect  of  significant  supplements  to
weak domestic investments and is considered a key vehicle for technology transfer.
The foreign ownership of many companies in PACs has allowed them easy access to
foreign  finance  and  markets,  and  to  modern  technology  as  well.  Even  where  a
minimal transfer of  ‘hard’  technology (product, process) has  been  carried  out,  FDI
has led to transfer of ‘soft’ (management) technology. In both cases the transfer of
technology  has  been  facilitated by the  availability  of  knowledgeable  individuals  to
adapt  it  to  the  local  circumstances.  However,  the  dominating  opinion  in  many
circles,  that  the  availability  of  cheap  highly  skilled  labour  in  PACs  is  attracting
foreign  investors,  has  been  disputed  in  a  recent  EBRD  study43.  Actually,  the  main
attractions  have  been  access  to  the  host  market  and  favourable  regulatory  and  tax
treatment.  For  this  reason,  in  1997  more  than  85%  of  EU  FDI  in  the  candidate
countries were concentrated in 4 countries – Hungary, Czech Republic, Poland and
Turkey. However, recent Eurostat data44 show that Hungary and the Czech Republic
are  characterised  by  relatively  lower  rates  of  growth  of  EU  investments,  while  in
Romania,  Poland,  Bulgaria  and  in  the  Baltic  countries  a  significant  expansion  has
been noted.

FDI  had  serious  implications  for  the  rest  of  the  domestic  enterprises  –  without
resources and skilled personnel their competitiveness has been very limited, leading
to  a  ‘dual  economy’  in  candidate  countries.  For  the  domestic  manufacturers  the
import of foreign machines and equipment has been  the  best  strategy  to  keep their
market niche. Even if enterprises are able to maintain their market position and carry
out  innovation,  high  cost  and  time  pressure  has  prompted  them  to  prefer  to  buy
turnkey technology rather than to develop domestic solutions45. However, due to the
insufficient  resources  in  most  cases,  technology  upgrading  has  been  limited  to  the
introduction  of  some  basic  machinery  to  allow  them  to  improve  quality,  meet
environmental standards and produce a limited range of contracted products.

The transfer of embodied technology from abroad and FDI alike make little use of
local  R&D  capacity  and  capability  (Box  7).  Nevertheless,  FDI  has  played  an

43 EBRD, Transition report 2000
44 Eurostat (2000a)
45 Mueller et al. (2000)

42

                                                          
essential  role  in  the  upgrading  of  human  and  capital  resources  in  CEECs.  Foreign
investors  have  created  better  employment  opportunities  and  have  contributed  to
upgrading  the  skills  of  the  best-trained  specialists  and  the  overall  improvement  of
the technological knowledge of the personnel. It is not surprising, therefore, that the
labour  productivity  of  foreign-owned  enterprises  varied  in  1998  from  150%  (in
Estonia) to almost 300% (in Hungary) of the productivity in domestic companies46.

Box 7: FDI and local R&D

After the investment by leading foreign companies (and the following change of ownership) in big
telecommunications  manufacturers  in  Hungary,  Poland  and  the  Czech  Republic,  local  knowledge
has  been  used  in  modernisation  and  in  the  localisation  of  imported  technologies.  To  assist  the
transfer, parent companies have provided technological assets such as R&D personal,  know-how,
licences  and  patents.  Apart  from  advanced 
the  subsidiaries  have  received
complementary financial assets and to a lesser extent  marketing  skills support. The main tasks of
the R&D units of the domestic company have been related to software development and adaptation
of the equipment to the local network. 47

technology, 

In the car and the textile industry foreign investors have established manufacturing plants and the
R&D function has been shifted to their technology centres abroad. Previous R&D departments have
been closed. The main emphasis of the foreign owners has been to upgrade and improve quality of
production  and  introduce  new  technologies  rather  than  to  focus  on  domestic  R&D  or  design
functions.48

Finnish  electronics  firm  Elcoteq,  that  assembles  handsets  for  Nokia  and  Ericsson,  has  opened
factories in Estonia. However, no Estonian R&D have been used. Moreover, due to the shortages of
local computer specialists, Scandinavian companies are using talented Estonians abroad instead of
using the possibility for outsourcing some tasks49.

Networking of enterprises

In  the  past  decade,  communication  technologies  -  especially  the  Internet  -  have
fostered new business configurations and world-wide production chains. Production
processes  continue  to  become  internationalised  with  the  modularisation  of
production  tasks  between  more  and  less  advanced  countries.  These  trends  provide
new  opportunities  for  technology  transfer  in  candidate  countries  and  technological
catching-up,  but  often  within  a  narrow  range  of  production  activities.  Sub-
contracting to foreign companies has become for many domestic manufacturers the
only  feasible  survival  strategy,  and  is  technologically  less  demanding  than  the
development of their own products. After losing the large Soviet markets and faced
with the increasing competition of foreign  firms,  companies  from  CEECs  in  many
sectors  have  been  integrated  into  the  product  life-cycle  through  subcontracting  or
outsourcing,  assembly,  distribution,  reverse  engineering  or  at  best  customising
product design (Table 6).

46 European Commission DG Enterprise (2001)
47 Sadowski (2000)
48 Romijn (1998)
49 European Trend chart on innovation, Country reports: Estonia (2000), http://trendchart.cordis.lu

43

                                                          
Table 6: Sectoral specificity and prevailing co-ordination mode

industry
telecom equipment

fragmentation
low

automotive parts

computers
software
audio & video

machine tools

high

high
high
high

high

scale effect
assembly

assembly

components
components
final product

final product

Source: Kubielas&Yegorov (2000)

co-ordination mode
merger&acquisition / joint
venture
contractual/ sub-
contractual/ joint ventures
contractual / outsourcing
contractual / outsourcing
contractual/ sub-
contractual
contractual/ sub-
contractual

For  SMEs  in  PACs,  as  in  many  countries,  networking  has  become  an  effective
means  of  innovation  in  its  own  right.  Interactions  with  other  firms  and  the
opportunities for  knowledge  sharing  and  exchange  (via  obtaining  patents,  licenses,
or purchasing of equipment) have allowed companies to be more specialised and to
focus  on  their  core  competencies.  For  complementary  knowledge  and  know-how,
they increasingly rely on interaction with other companies.

In  the  absence  of  FDI,  the  technology  transfer  and  know-how  crucial  for  the
development  of  leading  domestic  computer  manufacturers  have  been  transferred
through  non-equity  co-operation  agreements  with  foreign  partners.  A  process  of
learning-by-trading  and  building  strategic  co-operative  alliances  is  becoming  the
main  channel  for  technology  transfer  for  a  number  of  hardware  and  software
companies in CEECs. Although hardware companies have concentrated on the less
knowledge  intensive  computer  assembly  functions  they  have  often  been  able  to
attain  large  market  shares.  Moreover,  many  domestic  software  companies  have
exploited  the  local  knowledge  of  customers  as  a  competitive  asset  and  are  often
ahead of foreign companies in the local market that require local know-how such as
software for company management, financial accounting or banking. 50

Innovation performance and demand by industry

The  lack  of  data  on  the  innovation  performance  of  the  enterprises  in  candidate
countries  makes  it  difficult  to  draw  any  general  conclusions.  Recent  Eurostat
statistics for four countries51 show that large  enterprises  in  PACs  continue  to  have
higher  expenditures  for  R&D  and  innovation  than  the  SMEs,  (consistent  with  the
EU).  Shares  of  innovative  enterprises  in  Slovenia  (33%),  Poland  (29%)  and
Romania (28%) are similar to Spain (29%), but very low in comparison to Germany
(69%) or Ireland (73%)52. Generally, the share of research and engineering activities
in CEECs is more than two times smaller than in the EU. Enterprises in Poland and
Romania  tend  to  invest  in  acquisition  of  machinery  and  equipment,  while  in
Slovenia  the  emphasis  is  on  in-house  research.  Polish  companies  also  make
significant  investments  in  industrial  design  and  production  preparation,  while  in
Slovenia  second  place  goes  to  marketing  strategies.  All  companies  show  very  low
investment in training.

50 see Kubielas et al.(2000)
51 Eurostat (2000c)
52 Radosevic (2001)

44

                                                          
Limited financial resources and low revenues prevent domestic companies from funding
their  own  research  or  from  accessing  other  R&D  results.  Turkish  pharmaceutical
companies, for example, have low R&D capacities due to the small production volumes
and  the  price  regulation  in  the  sector.  Their  R&D  activities  comprise  mainly  research
related  to  licenses  or  production  problems.  Any  investment  in  long-term  research  in
developing  new  biotechnology  applications  for  pharmaceutical  products,  even  though
they have a big potential, has been limited53.

The Eurostat survey data suggest that demand for innovation has different grounds
and is disproportionately spread over economic sectors  in  candidate  countries.  The
majority  of  innovative  enterprises  focus  on  product  and  process  innovations  at  the
same  time.  While  undertaking  innovation,  domestic  companies  in  PACs  aim
primarily  at  improving  their  competitiveness  and  increasing  market  share.  For
meeting  this  target  they  focus  often  on  product  quality  and  diversification  through
in-house  research  and  using  the  services  of  testing  and  certification  companies  for
quality  assurance.  To  a  less  extend  the  reduction  of  labour  costs,  materials  and
energy  consumption  influences  the  innovation  activities  of  enterprises.  The
requirements  for  environmental  protection  are  also  inciting  innovation,  and  the
introduction  of  new  environmentally  friendly  technologies  or  other  measures  to
reduce the pollution.

The production of goods and services is becoming more knowledge-intensive and a
variety  of  new  services  employ  highly  qualified  labour.  Economic  growth  and  the
demand for knowledge-intensive services have influenced self-employment. A lot of
the  newly  established  firms  in  the  service  sector  are  engaged  in  engineering  or
consulting. Although quantitatively small, these entrepreneurial firms are important
catalysts of innovation and represent an important model of the human dimension of
technology transfer. A large number of the entrepreneurial firms are spin-offs from
former  research  units  or  universities,  oriented  towards  the  marketing  of  their  own
products.  Many  researchers,  mainly  in  the  area  of  applied  research,  have  founded
own companies and exploit the results of their R&D work.54

Action lines for innovation

Candidate countries differ in the policy prioritisation of innovation action lines, and
in the practical measures undertaken (see Table A3 in Annex III). Cyprus, Lithuania
and  Hungary  have  introduced  a  wide  range  of  practical  measures  covering  all
priority areas of the Innovation  Action  Plan55, while  Estonia, Slovenia, Poland and
Romania,  put  higher  political  priorities  on  education  and  awareness-raising
activities.  A  third  group  of  countries  (Latvia,  Slovakia  and  the  Czech  Republic)
emphasises  applied  research  and  strengthening  the  ability  of  enterprises  to  absorb
new  technologies.  Latvia  puts  also  high  priority  on  fostering  innovation  culture  of
enterprises and introducing measures for education and training.

Generally, the main problems are related to the  implementation of  these  measures  and
their real value for the enterprises. The lack of reliable data on innovation performance of
enterprises,  means  that  policy  decisions  are  more  influenced  by  the  EU  negotiation

53 BAŞAĞA et al. (2000)
54 Meske (2000)
55 COM(96)589 final

45

                                                          
requirements  than  either  the  needs  of  domestic  enterprises  or  national  and  regional
development  priorities. As the assessment in the EBRD Transition report suggests, the
level  of  the  most  advanced  candidate  countries  is  close  to  the  level  required  for
development  of  private  enterprises  without  major  obstacles.  However,  the  process  of
setting-up of legal and administrative environments for innovation is still not finished in
PACs.  Although  the  governments  have  launched  a  range  of  initiatives  to  foster
innovation  and  the  importance  of  business  networking  has  been  recognised  in  many
PACs, only a few have introduced real practical measures to encourage foreign investors
to use domestic suppliers or have provided a favourable tax relief (see Box 8). Moreover,
intellectual property rights (IPRs) are not considered as a key constraint on innovation in
PACs  and  few  activities  have  been  carried  out  to  establish  IPR  support  services  in
universities and to raise the awareness of innovative SMEs to protect know-how.56

Box 8: Fostering industrial research and innovation

Most candidate countries have introduced some tax initiatives for general improvement of business
climate and investment. Only Hungary and Poland from the first group of PACs57 had a special tax
deduction  for  industrial  R&D  investments.  However,  in  Poland  the  tax  relief  for  R&D  was
discontinued in 2000 as part of the overall tax reform process. In Cyprus a proposal for a 10 years
tax  holiday  on  profits  derived  from  the  production  of  new  products  is  being  discussed  by  the
government.  In  the  Czech  Republic  tax  iniciatives  have  been  introduced  for  companies  that  plan
expansion, foreseeing up to 10 years tax holiday on technology imports.

Hungary and the Czech Republic appear as pioneers in introducing policy instruments for support
of  the  development  of  business  networks  and  promoting  of  supply  chains  between  large  (foreign
owned)  firms  and  SMEs.  In  Hungary  within  the  INTEGRATOR  scheme,  launched  in  1999,  a
vertical network of a large firm and its suppliers is entitled to a grant to reinforce the linkages to its
members. The objective of this policy scheme is to increase the capacity of domestic companies to
become suppliers to multinationals for a longer term, as well as to foster domestic firms to upgrade
their technological and managerial abilities and practices.

Similarly,  a  government  subsidy  for  subcontracting  relationships  has  been  implemented  in  the
Czech  Republic.  The  established  supply-chain  network  of  VW/SKODA  is  considered  to  be  a
successful  case.  According  to  its  obligation  in  the  contract  with  the  state  to  address  domestic
suppliers,  the  company  has  developed  a  demanding  scheme  for  improvement  of  their  product
quality, observation of delivery terms and costs reduction. The result was that a number of domestic
firms  have  gained  the  status  of  reliable  component  suppliers  and  have  been  able  to  extend  their
production through contracts with other foreign manufacturers.

(Source: European Commission DG Enterprise, 2001)

Regional disparities and the scarcity of S&T factors in regional development plans also
cause major concern. The scope for local supply and demand for S&T and assessments
of  regional  strengths  and  weaknesses  in  R&D  are  mostly  unknown,  while  technology
transfer and innovation is to be encouraged. The R&D system mainly centres on capital
cities, with weak and slow regional innovation performance. Institutional decentralisation
has  been  attempted  in  some  candidate  countries.  Hungary  is  considered  the  most
advanced in  this respect, but more diversity has been achieved in Poland,  where  some
efforts  have  been  made  to  set  up  regional  institutions  for  technology  transfer  and  a
network of (regional) ‘Voivodship Clubs’58. Similarly, in Bulgaria, the Agency for SMEs
in collaboration with BARDA (Bulgarian Association of Regional Development Agents)
has  established  an  institutional  framework  of  more  than  20  Regional  Development
Agencies covering many administrative districts and operating at least one business/ agri-

56 European Commission DG Enterprise (2001)
57 Cyprus, Czech Republic, Estonia, Hungary, Poland, Slovenia
58 European Commission DG Research (1999)

46

                                                          
business  centre  or  business  incubator  and  Internet  bureau.  SMEs  and  regional
development  are  key  debate  issues  also  in  Romania,  in  particular  the  introduction  of
effective  measures to  promote  local  initiatives,  an  active  partnership  between  the  local
authorities, business and research and their co-operation with other European countries in
order to promote technological innovation.

The  involvement  of  domestic  enterprises  in  a  number  of  activities  within  EU
programmes59  has  facilitated  regional  and  bilateral  co-operation  in  innovation  and
research  (e.g.  within  wide  European  networks  of  Euro  Info  Centres,  Innovation  Relay
Centres, Business and Innovation Centres, Centres of Excellence). For example, PHARE
and INCO-Copernicus have provided support for product development, as well as foreign
consultancy  assistance  for  restructuring,  even  though  a  survey  of  enterprises  outlines
some specific problems60. In particular, foreign consultants are not always aware of the
domestic  problems  and  this  reflects  on  the  results  of  the  consultancy  and  training
provided.  Therefore, 
the
effectiveness of EU support, with the benefit of fostering interactions between domestic
industry and research, and upgrading the qualification of human resources in PACs.

involving  more  domestic  consultants  might 

increase 

2.3 Scientific human resources and mobility

Introduction

Abundant and mobile human resources for research are now regarded as essential to a
high performance research system in Europe and are the foremost important factor in the
RDI system.61 This implies a need for a significant increase in the stock of researchers
in  Europe  and  above  all  in  the  CEECs62,  where  the  numbers  of  active  researchers
declined significantly in the transition years. In some views this was a serious loss, in
others  a  necessary  shaking  out.  The  most  important  challenge  now  is  to  motivate
young  people  to  enter  research  as  a  career  and  then  to  make  it  attractive  to  stay  in
research.

First, talented people will only enter research careers in adequate numbers if there are
sufficient  opportunities  to  train  and  an  attractive  environment  in  which  to  work  as  a
researcher (i.e. good research infrastructures, centres of excellence, the possibility for
research autonomy, flexible and performance  related  career  paths and  good levels  of
remuneration).  Attracting  young  people  is  important  because  many  researchers  are
leaving for other occupations (brain loss) and because the labour pool of researchers is
ageing.  At  the  same  time,  the  market  economy  and  changing  practices  and
technologies require new skills from the researchers (e.g. management and marketing
skills,  retraining  with  new  techniques,  broader  scope)  which  calls  for  changes  in  the
system of training. The fundamental requirements are investment in research facilities
and merit based research careers.

Second,  the  only  sustainable  solution  to  international  brain  drain  (the  downside  of
mobility)  is  the  creation  of  high  quality  research  opportunities  in  the  candidate
countries.63 Actually, the integration of the R&D and innovation system of PACs into

59 EU Fifth Framework Programme, Tempus, Socrates, Leonardo, Phare, etc.
60 Romijn (1998)
61 COM (2000) 6 (18 January 2000), Towards a European research area
62 European Commission DG Research (1999)
63 See Casey et al. (2001)

47

                                                          
the European Research Area has probably been facilitated through the participation of
scientists  in  the  community  programmes  and  the  national  programmes  for  academic
exchange  of  the  EU  members.  This  international  exchange  is  widely  seen  as  an
important precondition for increasing the qualification of  professors,  researchers and
students,  for  development  of  European  research  standards  in  PACs  and  wide
European scientific integration.

Preserving and building of new assets

It is widely known that, the research capacity that existed under the former regime went
into  particularly  rapid  decline  during  the  early  1990s.  There  was  also  a  substantial
outflow of scientists from technological activity in virtually all of these countries, and this
did not appear to stabilise until the mid 1990s (Figure 6). On closer inspection, however,
the  loss  of  R&D  personnel  mainly  affected  industrial  research  rather  than  higher
education  (Figure  7)64.  Indeed  in  some  countries  such  as  Czech  Republic  university
teaching staff actually rose by 16% during the time of the shakeouts in industrial research
(1990-93).  The  overall  staff  cuts  indicate  a  substantial  shaking  out  of  an  industrial
research system poorly adapted to modernisation and not internationally competitive.

Figure 6: The decline of R&D personnel in the CEECs

120

100

80

60

40

20

)
0
0
1
=
x
a
m

(

x
e
d
n
I

0

1980

Poland
Slovak Rep
Bulgaria

1982

1984

1986

1988
1990
1992
Czechoslovakia
Hungary
Lithuania

1994

1996

1998
Czech Rep
Rom ania
Estonia

Source: Adapted from Figures 7 and 8 in Meske (1998), updated

Incontrovertibly, however, the result  was  an  absolute reduction  in  scientific  human
resources. First, there was a loss of qualified people out of the system. A number of
the  more  mobile  and  talented  researchers  have  been  "brain  drained"65.  Many
researchers  have  left  the  scientific  labour  force  altogether  and  are  now  "under-
employing" their skills in jobs which perhaps offer greater security and better pay, if

64 The data in Figure 7 are not fully comparable because of changes and differences in the definitions used. However, the general
pattern is clear and is repeated in the other countries that are not included here, notably Poland.
65 It is hard to estimate the size of the problem. For example, during the period of transition in the Czech Republic the period of
transformation, the number of university staff leaving for long-term stays abroad grew to a level of around 10% (with participa-
tion in short-term stays up to six months is much higher). Although this is significant previous fears of a massive brain drain in
the Czech research sector did not materialise.

48

                                                          
 
not the same intellectual challenge – i.e. ‘brain loss’. Second, there was a loss of a
potential training ground and employment potential for scientifically qualified staff -
the  new  private  firms  tend  to  buy  their  technologies  from  the  West  rather  than  to
locate R&D in the PACs. A lack of economic stability as it affects demand for S&T
staff will tend to encourage researchers to pursue their careers abroad.

Presently, the main concern is focused on people leaving R&D  for  other  economic
sectors.  However,  for  the  whole  society  this  brain-loss  could  be  considered  as  a
positive  trend  towards  increasing  the  quality  standards  of  the  companies  and  the
administration  and  distribution  of  knowledge  in  other  sectors.  For  example,  a
positive  byproduct  is  that  many  researchers  start  their  own  technology-based
companies and hence contribute to growth of innovation activities of industry.

Figure 7: The relative sector changes of scientists (CEEC)

s
t
s
i
t
n
e
i
c
s

f
o
e
r
a
h
S

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

6
9
9
1

9
8
9
1

8
8
9
1

3
9
9
1

y
r
a
g
n
u
H

2
9
9
1

.
p
e
R
k
a
v
o
S

l

5
9
9
1

0
9
9
1

2
9
9
1

.
p
e
R
h
c
e
z
C

5
9
9
1

0
9
9
1

3
9
9
1

4
9
9
1

i

a
n
e
v
o
S

l

Higer Education

Academies of Science

Industry

Source: Adapted from Figures 11, 12, 13 and 17 in Meske (1998)

In terms of new inputs to the stocks of researchers, the poor conditions for state-of-
the-art research (due to the outdated equipment) and the low level of salaries in the
research  sector  discourage  young  people  from  choosing  a  career  in  R&D.  Few
students  choose  to  study  scientific  subjects.  The  young  generation  in  the  Czech
Republic, for example, is not interested enough in such fields as physics, chemistry
and  some  technical  sciences,  while  students  have  become  interested  to  a  greater
extent  in  humanities  and  social  sciences,  which  were  suppressed  under  the
communist  regime66.  The  relatively  low  intake  of  young  people  contributes  to  a
general ageing of the population of researchers.

In response, significant policy attention is now being paid in a number of countries
to  attracting  young  researchers,  through  targeted  seminars,  training  and  exchange
programmes. Moreover, the more directly vocational subjects (business,  economics

66 Illnerova (2001)

49

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                          
engineering  and  other  technical  studies)  do  tend  to  be  quite  popular  opening  the
opportunity for a more applied research orientation of the R&D system in the future
and thus improving the current situation.

Also, the market economy sets new requirements for R&D management and hence
different R&D workforce skills are needed. New challenges for the human resources
in  R&D  are  to  develop  management  and  marketing  skills  necessary  in  the
competition  for  funding,  as  well  as  for  co-operation  with  industry  and  the
international  scientific  community.  Researchers  need  to  develop  a  much  broader
scope  in  order  to  be  able  to  assess  the  societal  and  economic  relevance  of  their
research  and  to  conform  to  new  technological  trends  and  industry  standards.  They
also need more generic research skills and knowledge to be able to work on projects
across  traditional  disciplinary  boundaries,  as  well  as  communication  skills
facilitating their work in multidisciplinary teams.67

Outdated equipment in research laboratories and universities is another bottleneck to
world-class  research  in  CEECs.  It  has  been  very  hard  for  most  of  the  institutes  to
attract national and international funding for the renewal of equipment. At the same
time  the  unique  and  expensive  scientific  equipment  provided  through  international
funding or within research programmes has been often inefficiently used.

As  noted  above,  a  critical  requirement  in  the  development  of  the  knowledge
infrastructure  is  the attraction of  young people  into  research  careers.  One  aspect  is the
targeted  replacement  and  updating  of  the  research  equipment  so  that  it  is  possible  for
researchers and university teachers to pursue a career in their home countries. Another is
the connection of the research-training system within the ‘e-Science’ infrastructures that
are  emerging  to  link  up  to  researchers  not  just  in  Europe  but  globally.  Also,
establishment of bridges between doctoral training and research careers will be necessary
for  people  to  take  the  risk  of  embarking  on  the  long  process  of  becoming  a  qualified
scientist. International collaborative projects will certainly improve the attractiveness of
such a route, but the attraction of a research career should be at home as well as abroad.

Mobility of researchers in enlarged European Union

The removal of obstacles to mobility is a priority that has been ratified in a series of
European  Council  meetings  (the  European  Council  in  Lisbon  March  2000,  Research
Council June 2000) and the recent publication of Communication of the Commission
“a  mobility  strategy  for  the  European  Research  Area.”  This  Communication  was
recently launched in a conference in Brussels “An Enlarged Europe for Researchers.”
The Communication makes the point that mobility is important because it:

•  fosters collaboration
•  facilitates the transfer of scientific knowledge
•  helps raise scientific excellence of individual researchers and supports centres of

excellence

•  widens access to top class training and facilities
•  increases  the  efficiency  of  research  investments  by  pooling  competencies,

experience, the use of share facilities

67 Costas Constantinou, Panel member

50

                                                          
In  the  development  of  the  policies  in  this  area  much  attention  has  been  given  to
removing  obstacles  to  mobility.  Barriers  identified  by  the  recent  High  Level  Group
include:  insufficient  funding,  opportunities  for  fellowships;  immigration  controls;
incompatibility between social security and tax systems; lack of internationalisation of
recruitment procedures; low support for families of researchers; and little transparency
on  implications  of  different  intellectual  property  right  regimes.  In  terms  of
administrative barriers to mobility it should be noted that researchers  from  candidate
countries  have  advantages  over  other  workers  in  that  they  will  have  early  free
movement within the EU15 supported by agreements on social  security,  bilateral  tax
agreements and the portability of supplementary pensions.

Women typically face greater barriers to mobility and high risks to their careers from
taking periods abroad. The issue of return from an international experience perhaps at
post-doc level is also problematic in that very few national research career structures
are set-up to allow people to move easily from one country to another. A crucial aspect
of these plans to stimulate mobility is the introduction of stringent quality controls on
mobility  schemes.  This  is  essential  to  permit  researchers  to  be  sure  that  their  period
abroad does not lead them into a dead-end street because the host research centre does
not provide sufficient opportunities to publish, develop networks with the club of elite
world class researchers or gain frontier experience. This will  be important  for  young
researchers from candidate countries.

Meanwhile,  the  Communication  also  makes  explicit  mention  of  the  need  to  avoid
brain drain from less developed regions and candidate countries. It proposes to do this
by furthering the distribution of research excellence in the different regions of Europe
including  the  less-favoured  regions  and  in  the  candidate  countries.  This  is  certainly
being furthered by the participation of Candidate country research teams in European
Community  Framework  Programme  projects  and  by  connection  to  the  2.5  Gbit
research  grid  (GEANT  and  TERENA  of  the  National  Research  Education  Network
Association). Such infrastructures increase access to European level research facilities
such as those in the EIRO forum 68

In  addition,  there  are  plans  to  make  provisions  for  the  return  and  reintegration  of
researchers.  Here  again  a  precondition  is  that  there  should  be  high  quality  research
teams  and  opportunities  to  undertake  cutting  edge  research  in  the  home  country  –
otherwise there would be nothing to attract back the most talented researchers.

However,  with  the  growth  of  the  economies  in  most  CEECs  (except  Bulgaria  and
Slovakia)  there  are  expectations  of  decreasing  emigration  of  researchers  to  third
countries69.  In  a  pan-European  prospective  the  mobility  of  researchers  can  be
considered  as  a  positive  trend  leading  to  the  exchange  of  experience  and  new  ideas,
international and regional collaboration and innovation transfer. At the same time the
personal appreciation of different cultures and traditions can contribute to the process
of  European  integration.  It  is  therefore  worth  thinking  about  increasing  the  flows  of
researchers  also  from  the  West  to  the  East,  in  particular  of  students  and  young
researchers.

68 EIRO forum is composed of CERN  (particle  physics), ESRF  (synchrotron  radiation),  ILL  (neutron  source),  EFDA  (fusion),
ESA (space), ESO (astronomy and astrophysics) and EMBL (microbiology)).
69 European Commission DG Research (1999), p. 248

51

                                                          
The  opening  up  of  the  PACs  academic  systems,  and  the  influx  of  foreign  funding,  is
leading to a considerably greater integration of PACs into the  international  science base.
This is indicated in the rise of  co-publishing. Some countries  (Hungary,  Czech  Republic
and Bulgaria for example) are able to build on strong research traditions. Other countries,
such as Romania  had much less to  build  upon. Such international integration,  of  course,
carries risks from potential brain drain and very great transformation pressures on existing
staff and resources.

Transformation pressures relate in particular to the role of academic research and teaching
as  it  divides  between  academies  of  sciences  and  universities.  There  is  considerable
uncertainty about the future architectural structure of the higher education/research nexus.

2.4 New environment for research and innovation

The innovation environment and the management of knowledge flows are of crucial
importance for candidate countries. However, if government measures are to lead to
a  higher  level  of  locally  based  technology  development  and  transfer  activity,  they
must  address  those  factors  which  facilitate  the  emergence  of  a  new  research  and
innovation  environment  –  macro-economic  and 
the
communication  infrastructure,  the  level  of  education  and  skills,  the  degree  of
personnel mobility, labour relations and prevailing management practices.

regulatory  conditions, 

Scientific  human  resources  are  essential  to  a  high  performance  knowledge  system
and  require  particular  attention.  Individual  researchers  are  at  the  centre  of  present
trends  for  strengthening  of  research  at  universities  or  in  centres  of  excellence,  for
building flexible research teams and establishing regional and international patterns
of  research  collaboration.  Moreover,  the  availability  of  knowledgeable  individuals
facilitates knowledge transfer and innovation and the fast acquisition and application
of  new  technologies  by  enterprises.  Generally,  the  mobility  of  researchers
contributes  to  wide  dissemination  and  use  of  knowledge  and  to  the  integration  of
research  into  the  economy  and  society.  Therefore,  it  is  necessary  to  focus  on
scientific  human  resources  in  order  to  preserve  and  upgrade  the  existing  research
capacities. The most important challenge, however, is to  motivate  young people to
enter  research  as  a  career  and  to  create  an  attractive  environment  to  keep  them  in
research, as well as to foster high quality research performance.

The  low  level  of  technology  transfer  within  PACs  underlines  the  need  for  public
support  to  industry  at  national  and  regional  level.  Although  during  the  process  of
harmonisation of the national legislation with the ‘acquis communautaire’ a number
of  measures  have  been  taken,  aimed  at  support  of  innovation  activities  and  SMEs,
their  practical  implementation  has  not  brought  the  expected  results  (often  due  to
inefficient application or lack of resources). Therefore, a challenge for  all  PACs is,
on  the  basis  of  real  data  for  innovation  performance  and  industrial  demands,  to
establish a favourable environment for companies to invest in new technologies and
product  development.  There  is  a  need  for  coherent  national  policy  in  support  of
innovation  and  the  introduction  of  various  instruments  for  direct  and  indirect
financial  support,  provision  of  venture  capital  and  new  tax  initiatives  (e.g.  tax
allowances, indirect and pay-roll taxation, etc.).

52

In the process of national policy formulation by the  government, regional development
dimensions as well as particular sectors and branches should be included, to determine
where to invest and where are the research and national comparative advantages needed
in  order  to  develop  own  competencies  and  identity.  An  important  step  is  to  identify
concrete short,  middle  and  long-term  strategies  that  are  tied  into  realistic  and  effective
funding mechanisms.

Although  a  range  of  new  institutional  structures  are  emerging  in  most  of  PACs  (e.g.
information centres, science and technology parks, and business incubators), there is still
a  need  to  consider  possible  measures  to  provide  a  full  range  of  innovation  support
services.  Small  and  medium  sized  companies  will  need  assistance  in  accessing
technological  knowledge  and  managerial  expertise,  as  well  as  in  financing  their  own
research and innovation.

The  effective  framework  for  the  protection  of  intellectual  property  rights,  in
particular industrial property (e.g. trademarks, industrial design and inventions, etc.)
might contribute also to business incentives to conduct domestic R&D activities and
encourages  the  transfer  of  state-of-the-art  technology  into  the  economy  and  its
diffusion  inside  the  country.  IPR  protection,  as  well  as  the  whole  industrial
environment, are important conditions  for FDI  and need  to  be  seriously  considered
by creating a framework for promotion of research and innovation in PACs.

Looking  at  the  demand-side,  market-driven  development  of  industry  might  be  a
crucial  factor  for  the  growth  of  innovation  activities  in  candidate  countries.  In  the
process of privatisation, restructuring or pure survival in the market, companies are
not in the position to think about investing in research and development. But, in the
long  run  competition  will  drive  enterprises  to  introduce  new  technologies,  new
products  and  services,  to  think  about  new  work  organisation  and  marketing
strategies.  The  large  local  companies  might  build  in-house  research  teams  or  even
invest  in  branch  research  units.  Co-operation  with  universities  for  training  and
contract  research  are  the  first  steps  towards  wider  integration  of  research  and
industry in process of knowledge sharing and exchange.

On the whole, governments need to play an integrating role in managing knowledge
in  the  whole  economy,  making  therefore  the  technology  and  innovation  policy  an
integral part of the overall economic policy. The corporate governance on one side,
and the legal and regulatory framework on the other, financial support mechanisms,
assistance for innovative SMEs, protection of IPRs and last, but not least, attracting
people  to  stay  in  research  –  are  important  factors  for  the  take-up  of  technology
transfer  and innovation and for building  a  coherent knowledge  system  in  candidate
countries.

53

54

Chapter 3
Learning Capabilities

3.1 Training and skills mismatch

Introduction

The global trends towards knowledge economy are changing the workforce in terms of
size  and  composition,  as  well  as  the  knowledge  and  skills  required  for  success.  The
competitiveness of companies appears increasingly dependent on the ability to develop,
recruit and retain a technologically sophisticated workforce. However, there are concerns
that the labour in PACs is not able to meet market demand for skilled and knowledgeable
workers and that this gap is growing. Therefore, the specific needs for a digital workforce
need to be addressed by the system of education and training focusing in particular on
economic relevance and higher quality and the need for life-long learning.

Vocational qualifications and the high tech economy

A preliminary view of indicators such as literacy rates and vocational qualification levels
gives the impression that the relatively high educational levels provide a good basis for
this  future  development.  In  international  comparisons  in  terms  of  'skill  stocks',  the
CEECs  perform  relatively  well.70  The  proportion  of  the  working  age  population  with
more  than  just  basic  education  in  such  PACs  is  comparable  with  the  medium  level
OECD  countries  such  as  Spain,  Portugal,  Greece,  Korea  or  Mexico.  However,  whilst
literacy levels and basic vocational qualification levels are relatively high, the proportion
of  the  workforce  with  non-vocational  tertiary  qualifications  is  lower  than  in  the  EU
(Table 7).

Table 7: Vocational qualifications of the workforce in Central Europe, 1997

Czech Rep. Hungary

Poland

Slovakia

Slovenia

Third level education

Upper secondary

Vocational and below

Total

8

33

59

100

14

32

54

100

12

34

54

100

13

34

53

100

15

28

57

100

EU

19

38

42

100

Note:From survey’s taken during the second half of 1997 except for Poland and the EU, which was taken during 1996.

One per cent of the EU sample gave no response.

Source: Knell (1998) based on various national labour-force surveys and the 1996 EU labour market survey.

But  a  recent  EBRD  survey71  casts  doubt  on  the  value  of  this  stock  of  vocational
qualifications. The survey tests the opinion of foreign investors’ on the quality of labour
in  transition  economies  and  the  main  deficiencies  of  workers  there  (Table  8).  In
particular, workers in candidate countries generally lack flexibility of adaptation and need
on average around 6 months to achieve the same level of productivity like in Western

70 see World Bank, 1996, Available indicators only partially capture all the aspects of human resource formation. On-the-job
training, the tacit aspect of human skills, learning by doing, quality of education and institutional context of human learning are
not captured.
71 EBRD, Transition report 2000

55

                                                          
Europe. A similar critique can be mounted at lower levels of educational qualification. In
that  the  apparently  abundant  supply  of  vocationally  qualified  workers  is  belied  by  the
quality of the skills. “It seems that the educational systems and the experience of workers
in the period before transition did not prepare them adequately for the requirements of the
market  economy.”72  Both  sectors  of  supply  of  qualified  labour  therefore  are  facing
demands for structural adaptation.

This is one of the reasons for investors to remain hesitant about using the most modern
production  processes  in  Eastern  Europe.  Moreover,  while  IT  specialists  and  financial
staff are at least available, there are difficulties in finding experienced managers.

Table 8: Main deficiencies of staff in CEECs compared to home country (as % responses)

technical skills

IT skills

University graduates
Vocational education
Secondary education
Primary or less

Source: EBRD, 2000

40.58
20.99
28.75
32.79

13.04
32.10
23.75
13.11

general flexibility/
adaptability
46.38
46.91
47.50
54.10

There is a significant mismatch between supply and demand of skills in different areas.
This is generating either unemployed or underemployed specialists on the one hand and a
shortage of specialists on the other.

Reforming vocational training provision

The  problem  seems  to  be  one  of  both  structure  and  content.  The  very  high  relative
shares of lower vocational enrolments in the PACs indicate a structural problem of early
and  rigid  specialisation  leading  to  insufficient  capacity  to  adapt  due  to  a  lack  of
transferable  skills.  Adaptations  such  as  a  later  entry  and  higher  level  entry  and  the
provision of complementary business training have been important in improving some of
these problems. More attention to transferable skills is also needed to stimulate dynamic
and  autonomous  learning  capabilities,  higher  emphasis  on  analytical  ability,  creative
thinking and communication and co-operation skills. This is true also for some CEECs
such  as  Romania  and  non-CEECs  such  as  Cyprus,  where  emphasis  has  been  on  rote
memorisation in order to pass landmark examinations and competitions.73

The  requirements  are  also  strong  to  meet  new  fundamental  demands  such  as  ICT
education, entrepreneurial and business strategic skills and the retraining of government
officials. As regards the use of ICT there are many issues to tackle including access to
basic infrastructure, development and training of trainers appropriate pedagogic methods
and  the  lack  of  development  of  instructional  content.74  Given  the  relative  under
resourcing of schools and colleges in most PACs on these counts, a stepwise approach to
this is necessary. An example is the Bulgarian national educational strategy for  ICT in
which  effort  is  consolidated  along  certain  lines  (basic  information  literacy  for  all,

72 EBRD Transition Report 2000, p.113
73 For Romania see Korka (1999) and for Cyprus see Constantinou (1999)
74 See for the example of Hungary in Mosoni-Fried (1999)

56

                                                          
professional applications and ICT specialists) and areas of education (e.g. concentrating
on 9-10th grade and entry level vocational schooling).75

An underlying theme emerging from reports on the educational systems in PACs is that,
whilst  the  higher  educational  system  appears  to  be  on  a  reform  track  (in  terms  of
expansion of capacity and  the  graduate  skills),  the  vocational  system  seems  to  drifting
away  from  the  requirements  of  modernised  industry  in  respect  of  both  initial  and
continuing  training  (i.e.  reskilling  of  existing  technicians  and  skilled  labour).  While
enrolments  in  more  theoretical  secondary  and  tertiary  education  are  surging  ahead,
vocational  schools  are  losing  their  appeal.76  For  example,  in  Romania,  vocational  and
apprenticeships  have declined  from nearly  29% of  students  in  1993 to  24%  in  1998.77
Similar data found  in Hungary and Slovakia with  declines  in  enrolments  in  vocational
secondary schools from about 35% to 25% (1989 to 1996).78 These trends raise the issue
of  schooling  that  will  retain  a  vocational  component  while  at  the  same  time  avoid  the
early specialisation that decreases flexibility79.

This seems to be a deep-rooted problem running the spectrum from trainers, qualification
systems, to attitudes and capacities of employees and teachers.80 Given the scale of the
continuing training requirement, it is of some concern that international comparisons in
10 OECD countries placed participation rates in Poland in last position with only about
15% of 25-64 year olds taking part in job related training in 1995.81

As regards on-the-job training, with the exception of a few leading firms, it is difficult for
skilled  workers  to  acquire  and  maintain  up-to-date  technical  skills  because  there  is
generally a lack of advanced applications of new technologies by local firms and because
the foreign firms tend not to situate highly advanced plants in the PACs. The reasons for
this  reluctance  to  invest  in  the  state-of-the-art  techniques  in  the  PACs  may  reflect
experience (or a prejudice) that skilled workers in these countries are  inflexible and so
unable to deliver the necessary productivity levels. Productivity level’s for such workers
are  thought  to  be  20-25%  lower  than  in  the  investor’s  home  countries.  Whilst  around
40%  of  the  investors  responding  to  the  EBRD  survey  claimed  that  inflexibility  of
workers is the main deficiency of workers relative to the parent company. These results
are of course highly variable on a regional level, with the quality gaps being negatively
related to progress achieved in transition.82

However,  other  issues  remain.  One  issue  is  certainly  the  restricted  levels  of  funding
available  to  this  sector.  On  the  one  side  government  loans  might  be  financed  through
incremental taxation on trainees once their incomes rise. Although institutional weakness
and  the  relatively  high  risk  of  unemployment  may  make  such  schemes  unworkable.
Government  training  vouchers  were  also  suggested  by  the  EBRD.  However,  such
schemes  will  probably  only  work  if  there  are  reforms  in  the  mode  of  provision  of
vocational  training.  Perhaps  by  creating  social  partnership  or  ‘dual  training’  type

75 Bulgarian Ministry of Education and Science (1998)
76 This may not be completely generalised – for example in Slovenia it is claimed that “In general vocational education is well
developed and connected to the employment needs of regions and fields” Umek (1999) p.133. He further states (p.140) that these
are mostly private with little state support.
77 Korka (1999)
78 Unicef (1998), p.23
79 Costas Costantinou, Panel member
80  See  for  example  Kaps  et  al.  (1999),  while  Kwiatkoski  (1999)  characterises  Polish  teachers  as  “numerous,  underpaid,
conservative and inefficient” p.88
81 OECD, 1998, quoted in Kwiatkoski (1999)
82  The  adaptability  issue  was  much  more  often  cited  as  the  largest  obstacle  to  business  development  (40%  of  respondents)
compared to Romania (27%), where other problems such as a lack of incentives to investment were paramount.

57

                                                          
apprenticeship  models  along  German  lines  might  increase  the  industrial  relevance  and
employability  of  trainees.  Also  on  the  agenda  are  plans  to  broaden  the  range  of  skills
(‘polyqualification’) acquired to give trainees flexibility in the future, given high rates of
technological and economic change. Such innovations in qualification systems of course
are  usually  underpinned  by  co-ordinated  attempts  to  increase  the  recognition  of  the
certificates at a national or international level. Another issue is the failure of universities
in  most  PACs  to  form  the  necessary  partnerships  to  meet  the  needs  for  further
professional training and lifelong learning.83

The structural mismatches between labour market supply and demand cannot be tackled
by the education and training system alone. On-the-job training and learning by doing are
crucial  to  resolving  them  as  many  lower  level  vocational  qualifications  and  practical
acquired skills become obsolete. This is one of the crucial obstacles to restructuring in the
CEECs,  which  is  especially  worrying  in  view  of  signs  that  the  traditional  system  of
enterprise-based  training  in  Central  and  Eastern  Europe  is  collapsing84.  All  in  all,  this
points  to  the  fact  that  training  during  the  business  process  (on-the-job  training  and
learning by doing) is essential for massive restructuring to take place. Its focus should be
the  creation  of  transferable  skills.  However,  this  is  unlikely  to  be  done  by  companies
whose incentives are to support development of more specialised skills. Obviously, this is
a  case  of  market  failure  where  there  is  considerable  scope  for  various  types  of  joint
public-private initiatives.

3.2 Towards world class higher education and training

Introduction

Enhancing the attractiveness and competitiveness of higher education in Europe is one of
the  objectives  of  the  commitment  of  the  European  ministers  for  building  European
Higher  Education  Area.  The  Bologna  Process85  sets  new  requirements  for  higher
education also in candidate countries. The introduction of greater flexibility in learning
and qualification processes could provide transferable skills and facilitate student access
to the labour market. The international recognition of the quality of teaching and research
in  higher  education  is  an  important  feature  for  the  development  of  colleges  and
universities. At the same time it fosters international mobility and gives the citizens the
opportunity of using their qualifications, competencies and skills throughout Europe. The
establishment  of  a  system  of  credits,  the  close  co-operation  for  setting  up  of  coherent
quality  assurance  and  accreditation/  certification  mechanisms  are  cornerstones  of  a
world-class higher education system.

Higher education trends

In  Central  and  Eastern  Europe  the  Soviet  division  of  labour  between  universities  and
very  specialised  higher  education  schools  (in  charge  of  teaching)  and  academies  (in
charge  of  research)  prevailed  up  to  1990.  Many  countries  have  by  now  re-integrated
research  into  the  universities  and  are  re-defining  the  tasks  of  the  academies  and  their

83 Costas Constantinou, Panel member
84 Boeri and Keese, 1992
85 http://www.unige.ch/cre/activities/Bologna%20Forum/Bologne1999/bologna%20declaration.htm

58

                                                          
relationship to the universities, which are re-emerging as centres of higher learning and
research.86

During  the  transition  period  higher  education  institutes  in  PACs  were  affected  by  the
deep reforms. Higher education institutions established new relations with state organs,
industry  and  Europe-wide  co-operation.  Today  university  autonomy,  new  democratic
principles,  the  elimination  of  restrictions  to  academic  freedom,  and  new  academic
curricula in tune with the economic trends and changing student demands all characterise
the emerging higher education system.

Whether the new systems are unitary87 or binary88 there is an increased recognition of the
needs  of  students  and  employers.  Many  new  programmes  have  emerged  that  are
professionally  oriented  and  focus  on  the  industrial  needs  for  specific  management
(innovation management, quality management) and multidisciplinary skills. The growing
university-industry  collaboration  in  developing  curriculum,  new  programmes,  PhD
projects influences further the economic relevance of the higher education in PACs and
the inflow of high-skilled specialists to industry and research.

Figure 8: People which do not have an upper secondary qualification (in % by age group)

100

90

80

70

60

50

40

30

20

10

0

Bulgaria

Cyprus

Czech
Republic

Estonia

Hungary

Latvia

Lithuania

Poland Romania Slovakia Slovenia Greece

Italy

Finland

Portugal

EU-15

Source: Eurostat, labour force survey, 1997

20-29

30-39

40-49

50-59

In terms of the future, rising enrolment rates indicates higher flows of qualified entrants
to  the  labour  market.  In  the  18-24  age  group  Slovenia,  Baltic  countries  and  Bulgaria
show participation rates in tertiary education that are similar to the average rate for the
EU  (23%).  As  elsewhere,  increasing  numbers  of  young  people  are  studying  beyond
secondary level. The percentage of the population leaving school without a qualification
at this level has been progressively decreasing and as a consequence the educational level
of the population is rising (Figure 8).89 The increasing student numbers observed in some
CEECs is partly a result of the new private universities and partly due to high levels of

86 Haug et al. (2001)
87  Unitary  systems  exist  in  the  Czech  Republic,  Romania,  Slovakia.  They  are  characterised  by  higher  education  institutions/
universities offering both general academic degrees and more professionally-oriented programmes.
88 The binary systems are based on traditional university sector and distinct non-university institutions for higher education.  In
some candidate countries they are still in the development phase, with the new laws on higher education adopted in the 1990s
providing for the possibility to set up non-university and private institutions. As for Malta, higher education is just changing from
a unitary to a binary system., Haug et al. (2001)
89 see Eurostat (2000b), pp. 3

59

                                                          
youth unemployment causing many younger people to opt to stay on in education.90 In
Hungary and Poland, for example, unemployment affects approximately one quarter of
the youth labour force who have left school.91 So far, though, the student population in
higher education (2% of population) is still relatively small compared to the EU average
(3.2%), especially in countries that have substantial reforms to achieve such as  Poland
and Hungary.92

In  terms  of  patterns  of  specialisation  in  higher  education,  there  also  appear  to  be
relatively high proportions of student enrolment in the 'practical' disciplines of business
and engineering. Tertiary studies in science and engineering have average annual growth
rates two to three times those of most of the EU. Whilst, the historic lack of attention to
the teaching of economic and business skills has created rapid growth in enrolments in
social  and  administrative  sciences,  at  least  twice  and  up  to  as  much  as  six  times  the
growth  rates  in  EU  countries.  For  example,  in  the  Czech  Republic  (Table  9)  students
have already changed their perception of university education, viewing it not only as a
way of preparing for a vocational specialisation but mainly to benefit from a generally
conceived  educational  system  and  to  acquire  transferable  skills  (analytical  thinking,
learning  foreign  languages,  computer  literacy).  Indeed  many  students  seem  to  be
choosing studies that offer good earning potential. Thus a survey in Hungary found, that
of  96  per  cent  of  recent  engineering  graduates,  that  were  seeking  extra  training,  two
thirds would prefer training in economics.93

Table 9: Czech Republic: number of accepted university students in the first year of
initial study (master`s or bachelor`s degree) by type of faculty

Type of faculty
Engineering and
Technology
Natural Sciences
Medicine and
Pharmacy
Humanities and
Social Sciences
Agriculture and
Forestry
Pedagogy
Others
Total

1989

1992

1994

1996

7,468

32.6%

7,110

25.3%

11,390

34.1%

11,323

29.3%

2,252
2,277

9.8%
9.9%

2,961
1,663

10.5%
5.9%

3,255
1,518

9.7%
4.5%

4,417
1,963

11.4%
5.1%

4,193

18.3%

7,469

26.7%

9,776

29.2%

11,495

29.8%

1,431

6.2%

1,379

4.9%

1,768

5.3%

2,160

5.6%

3,169
2,154
22,944

13.8%
9.4%

4,400
3,092
28,101

15.7%
11.0%

4,343
1,394
33,444

13.0%
4.2%

5,164
2,068
38,590

13.4%
5.4%

Sources: Statistical Yearbook (Universities) of the Institute for Information in Education, Prague 1990-97

The recent expansion of participation in higher education, however, must raise questions
as to the quality of the provision. The lack of indicators here prevents a clear picture. But,
rising  output  has  not  seen  a  corresponding  increase  in  the  numbers  of  teachers.  For
example  the  recent  growth  in  private  universities  in  some  countries,  whilst  needed  in
order  to  meet  quantitative  demand,  may  not  be  able  to  call  upon  sufficient  top-level
experts  to  provide  the  teaching.94  These  problems  may  be  quite  substantial,  especially

90 Umek (1999) suggests that the very high 90% of secondary school graduates going on to higher education in Slovenia may be
related to a marked difference in job opportunities for two levels of education
91 Eurostat (2000b), pp. 8
92  Comparisons  are  indicative  because  of  the  difficulty  of  comparing  different  educational  systems,  especially  as  to  what  is

included with tertiary education, and given changes in the statistical collection procedures.

93 Mosoni-Fried (1999)
94 See the Czech Republic case: Filacek et al (1999) where six new universities have opened since 1990

60

                                                          
given the underlying (and still untackled) mismatches between the role of the old system
of higher education and the demands it faces today95.

In fact the academic staff is decreasing and ageing rapidly. In Lithuania, for example, it is
expected that in 10 years more than 2/3 of the professors will be over 50 years and 1/2 of
them even over 60 years old96. Indeed, many young people are put off a university career
because  it  takes  so  long  to  establish  themselves  in  the  independent  position  of  full
professors.  The  observed  shift  in  the  interests  of  young  people  towards  legal  and
management-oriented studies makes the issue for attracting them in university teaching
and research more difficult.

Efforts  to  overcome  this  problem  in  Estonia  have  reached  some  results,  whereas  the
rising  average  age  of  university  staff  has  stopped.  However,  the  slow  increase  in  the
number of doctoral degree holders is too low to permit the reproduction of the Estonian
science and higher education. In order to  ensure continuity of  academic education and
science, Estonia needs ca 80 new PhDs per  year (following the corresponding ratio in
Finland  and  Sweden,  even  200).  In  1991–1998,  on  average,  38  students  including
external  students  have  completed  doctoral  courses  at  Estonian  universities  and  5–10
students abroad.97

While solving the problem of ageing professors and attracting young people in research
and university carrier, which correspond to the present demands of the increased student
population, PACs need to consider also the impact of the present demographic changes
on the longer-term development of universities. A serious assessment of the demographic
trends  at  national  and  regional  level  is  needed  to  ensure  sustainability  of  the  higher
education system in the longer run.

Another issue for universities is to develop cross-institute linkages to deliver courses. In
fact,  following  recent  growth  higher  education  seems  now  to  be  in  processes  of
consolidation, mergers or affiliation of smaller specialised institutions (Box 9).

 Box 9: Structural changes in higher education

In Estonia the Tallinn Technical University and the University of Tartu have established nation-wide
regional networks linking previous independent colleges and higher vocational schools to the university.
These trends might have positive impact on fostering regional collaboration and increasing the image
and  the  educational  level  of  smaller  institutions.  The  existence  of  branches  of  higher-educational
establishments and the exchange of teaching personnel might contribute also to the availability of better
educational opportunities at regional level and overcoming the financial barriers to many young people
related to the change of their place of residence.

In  the  Czech  Republic  a  strategy  is  being  elaborated  for  the  restructuring  of  the  non-university
institutions, as they are seen as being too numerous (around 170) and too small (in 1998/99 only 13
institutions had more than 400 students). The plan foresees that they will be merged, where possible,
and will be expected to offer very diversified programmes ranging from one to three years in accordance
with labour market needs.

(Sources: OECD, 2000a; Haug et al., 2001)

Concerns about quality of courses affect the value of the degrees obtained. Many PACs
are  moving  towards  a  more  flexible  award  structure  consistent  with  Western  models.

95 see Dyker et al. (1999)
96 Makariunas, ‘Enlargement Futures’ Project Steering Group meeting, January 2001
97 Rein Kuttner, Panel Member

61

                                                          
Some  candidate  countries  will  introduce  an  ‘Anglo-American’  degree  structure  with
shorter  first  degrees  and  many  post-graduate  possibilities  based  on  a  two-tier  system
(Box  10).  However,  the  degree  titles  vary  considerably  and  often  they  do  not  by
themselves give an explicit indication of the type and character of a specific qualification
and there is still much work to do to make the course offerings more consistent.

Box 10: University programmes in PACs

In Poland, where the existing system still combines one-tier and two-tier programmes, the draft of the
new higher education act concentrates on the two-tier model. In Estonia there is a move to standardise
the duration of Bachelor programmes to three years and of Master programmes to two. In Slovakia a
new higher education law will provide for an institutional diversification into universities (offering all
three  levels  of  degrees  in  a  large  variety  of  subjects),  specialised  higher  education  institutions  on
university  level,  but  with  a  more  limited  range  of  disciplines,  and  professional  higher  education
institutions  offering  Bachelor  programmes  relevant  to  the  labour  market.  Slovakia  is  planning  to
introduce the 3-2-3 model as the standard structure. It should be noted, however, that some of the two-
tier  systems  still  contain  one-tier  Master  programmes  in  specific  fields,  e.g.  in  Bulgaria,  Poland  and
Slovakia.

(Source: Haug et al., 2001)

Accreditation and transferability of skills

The  contemporary  trends  towards  mobility  of  the  labour  force  and  the  need  of
transferable  skills  face  candidate  countries  with  the  challenge  of  building  flexible  and
internationally  consistent  higher  education  and  training.  The  new  framework  needs  to
create  conditions  for  international  compatibility  and  acceptance  of  the  degrees  and
qualifications,  as  well  to  introduce  greater  flexibility  in  learning.  The  participation  of
PACs on equal footing in the European Higher Education Area requires some efforts to
make  their  higher  education  more  attractive  for  foreign  students  and  to  enhance  its
competitiveness.  The  international  recognition  of  the  quality  of  teaching  in  higher
education  is  an  important  feature  for  the  development of  colleges  and  universities  and
could facilitate the academic exchange with universities in EU15 and other countries.

The efforts of PACs to establish a system for quality assurance in higher education are
focused  on  the  introduction  of  licensing  procedures  for  teaching  and  accreditation/
certification  mechanism.  Most  of PACs  have  an  accreditation  agency,  sometimes  with
quality assurance functions. Some of them (such as Lithuania) have an evaluation agency
with  no  accreditation  functions.  Countries  without  an  agency  yet  include  Poland  and
Slovenia.98  Through  the  process  of  accreditation  could  be  periodically  evaluated  the
educational activities of institutions or specialised units of higher education, as well as
study  programmes.  However,  the  independent  judgement  of  the  experts  involved  in
the accreditation is especially dependent on the educational standards to be complied
with. This calls for the harmonisation of national educational standards of PACs with
the  international  ones  in  order  to  facilitate  mutual  acceptance  of  degrees  and
qualifications and to achieve international recognition of the education.

The establishment of a credit transfer systems, compatible with the European  credit
transfer  system  (ECTS)  is  another  challenge  for  PACs99.  The  participation  in
international  academic  exchange  programmes,  e.g.  Socrates/Erasmus,  requires  a
stricter  application of  ECTS-principles.  On the other  hand,  the  adoption  of  a  credit

98 CRE Project (2001)
99 At present, only Cyprus and Malta work with ECTS and ECTS-compatible systems.

62

                                                          
system  and  the  changes  of  the  degree  structure  could  be  considered  as  important
factors  facilitating  mobility  and  employability  within  the  countries  and  in  Europe,
and are cornerstones on the way towards international integration of higher education
and training in PACs.

Challenges  for  the  future  of  higher  education  and  training  in  PACs  are  the
development  of  new  modes  of  delivery  including  open-distance  learning  and  greatly
expanded  use  of  information  technology  throughout  the  higher  education  system.
Furthermore,  there  is  a  need  for  seeking  of  the  problem  of  re-training  current
professors  and  developing  the  next  generation  of  faculty  and  researchers  and  for
strengthened doctoral programmes and international affiliations100.

3.3 The right to education and the danger of ‘dual society’

Introduction

An education system providing access for all citizens can play an important role for
building  human  capital  and  for  rebuilding  the  economy  and  improving  its
competitiveness  in  the  long  run.  The  high  skills  and  learning  capability  acquired
during  the  educational  process  have  also  a  potential  impact  on  strengthening
democracy and social cohesion and promoting the participation of all citizens in the
democratic  processes  of  building  a  knowledge  society.  Besides  their  economic  and
societal impact, the equitable education contributes to the higher quality of life of all
citizens improving his/her skills and thus the opportunities for a better life.

Assessing the positive impact of higher education and training on the  economy and
society as a whole, all the implications of the educational gaps on personal life and
behaviour,  there  is  an  obvious  need  for  provision  of  equal  opportunities  of  every
individual  to  acquire  higher  skills  and  knowledge.  Therefore,  high  on  the  policy
agenda of every government is the goal of improved access to high quality education
and  the  provision  of  skills  promoting  lifelong  self-development  and  social
participation.

Present educational gaps

During  the  communist  time  the  children  in  CEECs  had  wide  access  to  basic
education,  equal  for  all  genders  and  societal  groups.  High  literacy  rates  were
achieved in most countries. In the transition period, however, CEECs had to balance
the  preservation  of  the  public  education  achievements  of  the  past  with  the  need  to
reform  the  system  and  introduce  new  management,  new  educational  curricula  and
materials.  Educational  systems  faced  the  challenges  of  providing  education  needed
for the digital age at a time of massive economic and social changes.

The  economic  decline  during  the  transition  caused  a  serious  drop  of  the  educational
budgets.  Most  of  CEECs  were  able  to  maintain  the  share  of  GDP  available  for  basic
education and thus the respective enrolment rates (Table 10). However, due to the large
declines  in  economic  output  and  government  revenues,  the  state  support  for  education
has been seriously reduced in real terms. For example, in 1996 the real expenditures on
education,  compared  to  the  1990  level,  have  fallen  in  Hungary  to  78%,  in  Slovakia  –

100 OECD (2000a)

63

                                                          
69%,  Latvia  –  55%  and  in  Bulgaria  –  25%.101  The  insufficient  financial  resources  for
education  have  led  to  lower  wages  of  teachers,  bad  preservation  of  educational
infrastructure  and  cancelling  the  provision  of  additional  services  in  the  educational
institutions  (e.g.  full-day  supervision,  meals,  health  care,  etc.).  With  its  low  status  and
relatively low pay, it is not surprising that recruitment is falling in the teaching profession
so that it is not only ageing (in some cases) and has become highly-feminised.102

Table 10: Basic school enrolment ratio (in %) 7/8 to 14/15 years old

Bulgaria
Czech Republic
Estonia
Hungary
Latvia
Lithuania
Poland
Romania
Slovakia
Slovenia
Turkey1

1991
97.3
98.7
93.8
99.2
94.5
92.0
97.3
89.4
96.5
96.8
89.03

1992
95.1
99.2
91.1
99.2
91.1
92.5
97.1
89.6
95.7
97.6
88.69

1993
94.0
99.1
91.4
99.1
89.1
91.6
97.2
90.3
94.9
97.8
85.48

1994
94.3
99.5
91.5
99.1
88.6
92.1
97.1
91.4
94.4
96.7
83.08

1995
93.7
99.4
92.3
99.1
89.1
93.2
97.2
92.6
94.3
97.3
90.07

1996
93.6
99.2
92.6
99.2
90.7
93.3
97.4
93.9
93.4
99.8
90.33

1997
94.0
99.1
93.5
99.2
91.3
95.1
98.0
95.0
na
99.8
90.74

1998
94.3
97.6
95.0
99.2
90.9
96.1
98.1
97.0
93.9
98.2
82.21

Source: EBRD Transition Report 2000 

(1) Statistical yearbook of Turkey 1999

CEECs have introduced decentralisation of educational finance and responsibilities.
The  unequal  distribution  of  financial  resources  to  local  authorities  has  widened
regional disparities in the provision of  education  and training103. Besides  the  falling
educational  quality  and  growing  prices  for  learning  materials,  a  number  of  schools
have  been  closed  in  rural  areas,  requiring  the  children  to  travel  every  day  to  the
closest  town.  At  the  same  time,  due  to  high  regional  unemployment  and  falling
wages,  families  in  small  towns  and  rural  areas  have  been  not  able  to  meet  the
increased expenses for the education of their children. Thus, the kids in rural areas,
where  the  education  is  really  needed  to  break  an  intergenerational  cycle  of
unemployment  and  deprivation  due  to  missing  skills,  have  limited  opportunities  to
obtain better education and skills and improve their life.

The  overall  decline  of  education  budgets  on  the  one  hand,  and  the  emergence  of
private  educational  institutions  and  additional  paid  classes,  on  the  other,  are
encouraging  new  elite  education  streams.  In  particular,  higher  educational
performing  secondary  schools  are  able  to  attract  additional  finance  from  private
companies and non-governmental organisations. This further widens the educational
divide  and  the  opportunities  for  obtaining  up-to-date  education  using  new
educational  tools  and  communication  technologies.  This  elite  stream  probably
explains  the  continuation  of  high  mathematics  and  science  scores  in  international
tests.  According  to  the  results  of  international  studies104,  the  children  in  7th  and  8th
grade in the Czech Republic, Slovakia, Slovenia, Bulgaria and Hungary have better
results than in Germany, the U.S. and other OECD countries. These might be a result
not  only  of  the  good  educational  traditions  in  these  areas,  but  also  of  the  present
emphasis  on  secondary  education  (Figure  9).  Obviously,  many  candidate  countries
(Bulgaria,  Cyprus,  Czech  Republic,  Baltic  countries,  Slovenia,  Malta)  streamline

101 UNESCO (2000a)
102 UNICEF (1998) p.29; see also UNDP (2000a)
103 UNDP(2000b), p.72, World Bank Institute (2001)
104 UNESCO (2000a)

64

                                                          
more  funds  in  secondary  education,  while  others  (Poland,  Romania,  Slovakia,
Turkey) focus on primary education. The large size of the countries from the second
group (except Slovakia), and the large number of population living in rural areas face
the  governments  with  more  complex  problems  in  providing  equal  education
opportunities. In Turkey, the growing number of children accentuates the challenge.

Figure 9: Public educational expenditures (as % of all levels)

pre-primary and primary 1995-97

secondary 1995-97

tertiary 1995-97

80
70
60
50
40
30
20
10
0

Bulgaria
Cyprus
Czech Republic
Estonia

Hungary

Lithuania
Latvia

Malta

Poland

Romania

Slovakia

Slovenia

Turkey

Finland

Greece

Italy
Portugal

Japan US

Source: Human development report 2001

Special  attention  requires  the  polarisation  in  education,  e.g.  the  widening  gap
between  regions,  small/large  towns  and  rural  areas,  social  groups,  genders  and
nationalities.  Candidate  countries  are  presently  faced  with  grave  problems  such  as
early  school  leaving  and  youth  employment,  few  upper-secondary  graduates,
declining  of  vocational 
limited
opportunities  to  continue  their  education  due  to  the  high  costs  for  textbooks  and
learning materials. On the other hand, the lower level of acquired knowledge in basic
school and the lack of means to pay for additional course results often in inability to
pass  the  entry  exams  for  upper-secondary  and  vocational  schools,  as  well  as  for
tertiary education. Thus, the admission to higher-level education and obtaining better
skills is a function of the efficiency and quality of the previous educational level and
might impose serious barriers for further personal development.

training  enrolments105.  Some  children  have 

There is also great concern about children from disadvantaged groups106. Although a
number  of  measures  have  been  declared,  drop-out  rates  are  very  high  amongst
children from ethnic minorities, in particular Romany children, children of refugees
or those with physical and  mental  disability.  Their  integration  and  the  provision  of
equal  opportunities  for  raising  the  literacy  level  of  the  population  are  important  in
order to bridge the growing divide in the society.

Meanwhile assessments of the adult literacy level in some candidate countries point out
that  it  is  below  European  standards107.  The  dramatic  changes  following  the  wide
introduction  of  new  technologies  increase  the  requirements  for  life-long  learning.
However, the educational system in PACs is oriented to young people and to some extent

105 see European Training Foundation (2000)
106 see UNDP (1999b), p.57, UNDP(1998), UNDP(1999c); OECD (2000b)
107 UNESCO (2000b), UNDP(1998)

65

                                                          
to  students  that  have  recently  completed  their  primary  or  secondary  education.  The
training and re-training of adults is considered to be a task of their employees and partly
of  the  social  system  for  unemployment  support.  Non-governmental  organisations  have
started initiatives focused primarily in areas where the demand and potential for economic
gain are greatest (business, law, foreign languages, etc.). However, the costs of attending
such programmes are often prohibitive.108

Hopes for the future of the education and training in PACs give the approval of new
educational strategies and plans aimed at meeting the objectives of education for all,
paying  particular  attention  on  children  in  rural  areas,  children  with  special
educational needs and adult education109.

Box 11: Access to education in Baltic countries

All three Baltic States have made strong commitments to civil liberties and to narrowing the gaps in
access  and  opportunity  for  all  people  within  their  countries.  They  recognise  that  fulfilling  these
commitments is an essential condition for modern democracies, for accession to the European Union,
and  for  full  participation  in  the  global  economy.  In  the  OECD  education  policy  reviews,  the  teams
underscored the need for further progress on:
•  Narrowing  the  disparities  in  quality  and  educational  opportunity  between  urban  and  rural  areas
(including the need for public administration reform to address the problems of small municipalities
that lack the capacity to sustain strong schools).

•  Ensuring that special needs students are served, including addressing the health and economic needs

of young children to ensure that they are ready to learn.

•  Continuing to make progress on addressing the needs of language and ethnic minority populations

to ensure that they can be full participants in the civic and economic life of the countries.

•  Countering the strong tendencies toward elite secondary schools and a focus on university entrance
with deliberate steps to ensure that all students – not only the most academically gifted and those
with social and economic advantages – have access to quality education and the opportunity to gain
essential knowledge and skills.

(Source: OECD, 2000a)

Vision for the future of education

The education is a key feature for the future of candidate countries. However, faced with
the  economic  reforms  and  increasing  social  disparities  their  governments  are  missing
resources to meet the educational challenges. If not addressed, the educational divide will
constitute a time bomb leading to ‘dual society’ in the future.

The non-equal educational opportunities for minority groups and migrant workers and the
discrimination  between  regions  and  sexes  might  have  dangerous  consequences  on  the
whole  society,  decreasing  the  share  of  society  with  higher  skills.  The  lower  levels  of
education  have  very  high  social  returns  related  to  economic  growth,  social  cohesion,
health, crime. Better-educated people have higher requirements on products they use, and
their quality of life. Their contribution to the economic growth could be two-fold: as high
skilled workers, and with their higher demands on delivery of a big variety of goods and
services,  which  stimulates  on  its  own  the  innovation  of  industry.  Better-educated
individuals are more tolerant, less inclined to crime and violence, infringement of law and
another’s  property.  Higher  cultural  achievements,  peaceful  life  and  environmental
protection are also dependent on the overall educational level of the population.

108 OECD (2000a)
109 see country reports on http://www2.unesco.org/wef/countryreports/home.html

66

                                                          
The  improvement  of  the  quality  of  education  and  the  access  of  all  individuals  are
essential  for  candidate  countries.  The  present  dilemma  of  introduction  of  paid
education  at  all  educational  levels  or  further  decreasing  the  quality  of  education
might  further  contribute  to  splitting  of  the  society.  The  regular  monitoring  and
assessment  of  the  education  trends  and  achievements  are  important  tools  for  early
warning on possible problems and timely introduction of corresponding measures.

Investments  in  education  and  training  are  essential  for  the  well  being  of  the
population,  the  strengthening  of  democracy  and  economic  growth.  There  is  a  clear
need for higher spending of PACs in basic education of urban and  rural population
with  reasonable  average  quality,  and  in  provision  of  adults’  qualification  and
training.  Alongside,  more  flexibility  of  the  educational  system  might  facilitate  the
learning  among  youth,  who  are  working  part-time  or  who  disadvantaged  in
continuing  education  because  of  the  lower  quality  of  the  rural  school.  Higher
educational  achievements  of  children  need  also  to  be  encouraged,  e.g.  through
special grants and scholarships mechanism for most talented children.

Within  the  process  of  integration  of  candidate  countries  to  the  EU,  an  early
recognition of the dangerous implications of education decline might be an incentive
to  find  various  tools  to  close  the  West/East  divide,  similar  to  the  ones  used  in  the
closure  of  the  North/South  divide  between  EU  member  states.  At  present  EU15
member states are afraid of receiving a large number of low-skilled migrant workers
after  the  accession.  The  contribution  of  the  EU  to  the  improvement  of  educational
level  in  PACs  might  have  two  important  stabilising  effects  –  to  reduce  the  low-
skilled  population  in  candidate  countries  and  to  increase  their  attractiveness  to
foreign investors as good potential markets and places with skilled labour force.

67

68

Future Steps

Where next?

A  report  such  as  this  can  only  scratch  the  surface  of  the  wide  issues  of  technology,
knowledge and learning in the candidate countries. We have tried to signal some of the
main areas of challenge and opportunity, these include:

•  Science  and  Technology  governance:  to  move  away  from  rhetoric  to  reality,
ensuring balance of supply and demand, openness, participation and quality
•  Building  of  a  coherent  Knowledge  system:  based  on  wide  integration  and
interaction of education, research and innovation and their efficient utilisation in
overall catching-up process and building future excellence

•  Mobility of researchers: turning mobility into an advantage for the integration of

candidate countries research into a global science and economic system

•  Human  capital  formation:  to  meet  present  and  future  needs,  ensure  sustainable

(economic) development and build cohesive knowledge-based society

As the title suggests this conclusion does not attempt to synthesise the results of our work
but to look forward to areas of future developments of our work and to draw out some
lines to strengthen the prospective elements of our work.

Cross-cutting issues to develop

Given that the work of all Thematic panels of the ‘Enlargement Futures’ project in this
first phase has been largely in parallel, there are areas of work that cut across this panel
and the others and which could provide a focus for the future. For example:

•  Making  a  clear  link  in  S&T  priority  setting  between  excellence  of  research
capacity and relevance to economic and societal goals requires direct comparison
of industrial specialisation profiles and FDI from the Economic Transformation
Panel’s work.

•  Concerns  for  environmentally  sustainable  development  and  conservation  of
natural resources are very important for defining research priorities, especially in
issue driven research, given the high importance of agriculture and protection of
the natural environment in some candidate countries.

•  Health  needs  and  social  developments  (demographic  ageing,  endemic  illness)
have implications for S&T priorities in certain candidate countries. Introducing a
societal  prospective  component  to  S&T  agenda  setting  to  take  account  of  such
trends  is  a  very  important  part  of  assessing  whether  the  research  priorities  are
relevant to domestic requirements.

•  Economic transformation in the form of developments of the innovation capacity
depends  upon  a  sectoral  and  regional  level  assessment  of  SME  capacity  for
innovation and need for venture capital.

•  Strategies  and  policies  on  intellectual  policy  are  another  issue  relating  to
economic transformation that could be further explored.  For example,  issues to
explore include the role of IPRs as an incentive to industrially relevant research or
IPR issues in setting up university-industry spin-off and partnerships.

69

•  Policies on learning and skills and the development of knowledge society issues
have  particular  relevance  for  rural  areas  that  face  extreme  problems  of  under-
employment and unemployment.

•  A generic problem, which affects panels’ results, is the lack of  comprehensive,
reliable and consistent data on all PACs. Moreover, the different pathways these
countries followed, the different economic situations,  culture  and  traditions  and
even  the  different  size,  present  a  big  challenge  of  any  common  treatment  and
make it very difficult to draw general conclusions or even group the countries.

Science and society: a key issue to develop

Although this phase of the project is now approaching completion, it has become clear
that several key issues will have to be developed in further rounds of the project. These
issues centre mainly around ‘science and society’ or more broadly the development of the
societal component of a knowledge-based economy. As a preliminary mapping of these
issues we can identify some major axes of development that could orientate future work.
These  fall  under  the  headings  of  societal  values  and  ethical  issues  relating  to  the
development of new technologies, for example:

•  Access  –  opening  the  opportunities  of  the  knowledge/  learning  society  to  the

widest possible number of people

•  Equality/ equity – especially concerning the role of women in research
•  Governance  issues  –  moving  towards  greater  transparency  in  priority  setting  –

finding appropriate institutional models

•  Democracy – raising participation and motivation of people to take part in S&T

decisions and development

•  Ethical issues in the conduct of research and development and in the application

and marketing of new technologies

Access  to  the  Knowledge  society:  although  we  have  considered  in  some  depth  the
development of the S&T base we so far have not adequately addressed the wider societal
implications  of  the  emerging  knowledge  society/  information  society.  The  on-going
socio-economic    transformation  is  based  on  3  interrelated  processes  of  increasing
informatisation, changing communication and interdependence structures, and changing
the processes of knowledge creation and utilisation. Research domains include what the
ongoing transformation is about and what areas of research will gain in importance as for
impacts on everyday life, systems of production and systems of opinion formation and
new technologies production.110 The recent efforts to extend the ‘e-Europe’ action plan
towards candidate countries indicate a commitment to achieve a wider  development of
the Information Society Technologies.111 The main lines are: working towards a cheaper,
faster,  secure  Internet;  investment  in  people  and  skills  (including  young  people)  and
developing the use of Internet applications (e-commerce, e-government, e-health, etc.).112

Equality & equity: recently there have been significant efforts to evaluate the role and
status  of  women  in  research.113  The  general  picture  is  that  despite  of  women  at
undergraduate  level  there  are  very  few  women  in  the  higher  echelons  of  science  and
research,  even  in  disciplines  such  as  biology  where  women  take  a  major  share  of  the

110 See Tuomi (2001)
111 http://europa.eu.int/information_society/eeurope/news_library/documents/index_en.htm
112 See Gourova et al (2001)
113 ETAN Expert Working Group on Women and Science (2000) Science policies in the EU: Promoting Excellence through
mainstreaming gender equality, CEC, Luxembourg.

70

                                                          
doctorates. This represents a  serious under usage of trained  and  talented  people.  Some
candidate countries figure in the very highest ranks of female participation up to graduate
level (e.g. Bulgaria and Estonia). It is interesting to note that countries in which the status
and wages of academics tends to be lower can sometimes have relatively high levels of
women at full professor level (e.g. 17% in Portugal versus 14% in France, 8.5% in the
UK and 6% in Germany). The ETAN114 Strata report suggests (using the example of the
high rates of women professors in Portugal) that bright male scientists were brain-drained
or preferred better paid careers in industry.  The only data offered for candidate countries
indicates that these effects might be echoed in candidate countries. For example Turkey
has a very high rate of women professors (22%) and Poland shows very steep rises in
appointments of women to professorial positions: 9.4% in 1977 rising to 22% in 1996.
However, further data collection would be needed to confirm this hypothesis. If true there
is a basis, as in the Portuguese case, for targeted development of research infrastructures,
group leader grants and fellowships to actually allow candidate countries to lead the way
towards gender equal science system.

Governance:  as  we  argued  above  the  emergence  of  substantial  foresight  activities  in
several  candidate  countries  indicates  that  a  more  open  system  of  S&T  priority  setting
seems  to  be  on  the  way.  However,  governance  structures  remain  fragmented  (many
overlapping  departmental  responsibilities  and  also  gaps  of  coverage).  There  are  also
concerns about the extent to which the different levels of governance  actually connect.
Transition  and  accession  puts  a  double  pressure  on  the  development  of  governance
systems because the process of institution building is not yet complete at a national level
and yet is being overlaid by the requirements to establish further levels of governance for
the EU.

Democracy: for the CEECs, science was in communist times often directed towards the
support of the political regime. With transition, this role has changed to the more normal
scientific ethic, i.e. a deliberately apolitical stance.  However, attitudes and behaviours are
often  slow  to  change.  Thus  particular  efforts  are  needed  to  win  back  public  trust
confidence  in  the  Science  and  Technology  institutions  and  ‘expertise’.  For  many
candidate countries this lies on top of a more general need to find ways to involve the
public  in  the  rapidly  advancing  scientific  knowledge  and  the  complexity  and
interdependence  of  contemporary  societies,  economies  and  cultures  (see  Commission
White Paper on Governance-July 2001). Such actions call for participatory mechanisms
such  as  citizen  juries  and  people’s  panels  in  technology  foresight  as  well  as  joint
meetings  to  allow  exchanges  of  views  from  different  countries  on  topics  of  European
relevance (e.g. biotechnology applications).

Ethical concerns: “To facilitate collective decisions it is necessary to first clarify which
considerations  we  consider  most  important”115.  Developments  in  applications  of  new
technologies, particularly in  the  sphere of  Bio and  Info technologies  raise  fundamental
new questions on what do we want of these technologies and what are the consequences
of  our  choices.  Attention  has  been  mainly  focused  on  whether  these  technologies  are
good business, other focus on whether their use is right or wrong -does it add something
good to our lives? Values, moral and ethics are at the foundation for public attitudes in
particular with regard to genetic engineering.

114 quoted above
115 Pia Gjellerup (1999)

71

                                                          
In  contrast  to  the  idea  that  ethics  is  a  preserve  solely  of  private  preference  the  use  of
biotechnology and genetic engineering is actually a question of political decision and
choice. Moreover choices such as which genetic engineering techniques are acceptable
cannot be made by each country in isolation. Behind the choices lie attitudes and values.
Debate  on  ethical  aspects  of  relevant  emerging  technologies  cannot  be  conducted  in
isolation in each individual country: initiatives should be joint. Candidate countries find
themselves  between  pressures  to  operate very open research ethics regimes  in  order  to
attract  multinational  investment  and  on  the  other  hand  to  help  consolidate  a  European
position on such issues.

Prospectives

In  developing  this  report  we  were  confronted  with  the  fact  that  assessing  the  current
situation  in  the  candidate  countries  is itself  rather  difficult  to  assess  due  to  the  lack  of
access to fully reliable and comprehensive data. If this report has any measure of success
it  will  be  in  capturing  current  challenges  for  the  future  rather  than  in  providing  a  full
prospective scoping of the 2010 time horizon.

However, the panel activity did make an attempt to put together some views on what are
the  major  challenges  and  targets  for  pre-accession  countries  on  the  2010  time  scale.
These tended to fall into two categories: where might we be and where might we try to
be in 2010.

The  ‘where  might  we  be’  statements  provide  a  possible  starting  point  for  the
construction  of  scenarios.  For  example,  there  was  considerable  interest  in  different
strategies  on  the  development  of  S&T  specialization  profiles  at  regional  and  national
levels. Three scenarios were offered:

•  Full  integration:  all  PACs  are  integrated  into  the  global/EU  S&T  system  and
specialised  in  areas  where  they  could  offer  excellence  or  have  competitive
advantage.

•  Regional  co-operation:  countries  and/  or  regions  consolidate  into  co-operative
blocs  in  respect  to  S&T  capacity,  in  some  cases  these  blocs  could  transcend
borders to create trans-national innovative regions or corridors.

•  Uneven  and  multi-speed  progress:  big  variations  emerge  with  some  PACs  well
integrated in the global/ EU research area and others struggling to find a profile.

Here  the  implication  is  that  a  search  for  complementarities  at  both  domestic  and
international  level  is  likely  to  yield  a  more  even  and  overall  stronger  basis  for  the
enlarged ERA. In particular, to develop this further it would be necessary to have reliable
mapping of existing areas of strength and an associated assessment of the relevance of
these areas of strength in the context of national needs. This mapping would be linked to
strategies to establish solid centres of excellence (CoE) according EU criteria/ standards
and to ensure the sustainable development and survival of these centres (target 10 years).
This  would  require  systematic  indicators  on  candidate  country  CoEs  against  other
countries  and  against  EU15  standards  including  relevant  drivers  (i.e.  not  just  scientific
publications and citations but linkages with industry and soft indicators such as societal
relevance and impact).

The where ‘might we try to be’ are more normative scenarious: they concerned attempts
to set targets in order to focus development. Example included:

72

•  Setting verifiable S&T targets, such as achieving the average EU R&D spending

• 

level by 2010.
‘E-everything’  strategies:  that  is  by  setting  some  targets  for  the  levels  of
development  of  e-services  by  2010  in  order  to  trying  to  leapfrog  economic
growth.

•  Establish a flexible research career – this would involve a multi-point plan with
targets  to  increase  the  career  flexibility  of  researchers  to  be  mobile  between
academic/  public  research  &  industrial/  private  research;  attractive  wage  and
benefits packages; better research infrastructure; incentives to young stars (from
home or abroad) into candidate country research systems.

•  Knowledge society targets – making life-long learning a reality: The panel argued
strongly  for  targeted  efforts  to  develop  new  models  of  schooling,  vocational
education that allows flexibility and transferability of skills, the establishment of
transferable credit and compatible accreditation systems; continued education for
teachers; new pedagogics that are learner-centred rather than didactic or content
driven.

These  cases  are  simply  examples  stemming  from  the  creativity  of  the  panel.  The
challenge would be to set up targets that are realistic and verifiable so that progress can
be measured. Also, as with most performance driven plans, checks are needed to make
sure that the targets are acceptable and legitimate and that they move developments in a
desirable direction. Targets should be chosen as incentives to develop not for their own
sake.  Finally,  a  solid  indicator  base  would  be  needed  to  underpin  these  strategies,  and
evaluation of achievements.

73

74

Bibliography

by 

each 

Accession 

BAŞAĞA,  H.  ve  ÇETİNDAMAR,  D.  (2000),  Competitiveness  strategies:  Biotechnology  report,
TÜSİAD, 2000
Boeri, T., M.Keese (1992), Labor markets and the transition in Central and Eastern Europe, in OECD
Economic Studies (18), 133-166
Bulgarian  Ministry  of  Education  and  Science  (1998),  National  Educational  Strategy  for  ICT,
http://www.minedu.government.bg/information/ict_project.htm.
Casey,  Mahroum,  Ducatel  &  Barré  (2001),  The  Return  Mobility  of  Academic  researchers
http://futures.jrc.es
Constantinou, C. (1999), Background Papers of the Workshop on ‘Education, training and skills in the
pre-accession countries’, 11-12 Nov. 1999, Vienna, IPTS
CRE  Project  (2001),  Towards  accreditation  schemes  for  higher  education  in  Europe?,  Feb.  2001,
http://www.unige.ch/cre/activities/accreditation/accreditation_home.htm
Czech Republic Government, R&D Council, http://www.vlada.cz/1250/eng/vrk/rady/rady.htm
Dyker, D. and S.Radosevic (1999), Building the  knowledge-based economy in countries in transition,
SPRU Electronic working papers, 36, http://www.sussex.ac.uk/spru/
EBRD Transition report 2000
European  Commission  DG  Research  (1999),  report  on  ‘Impact  of  the  enlargement  of  the  European
Union towards the associated central and eastern European countries on RTD-innovation and structural
policies’ by Coopers&Lybrant
European  Commission  DG  Enterprise  (2000),  European  trend  chart  on  innovation,  Country  reports,
http://trendchart.cordis.lu
European Commission, Enlargement Strategy Paper, Regular Reports from the Commission on Progress
towards 
2000,
http://europa.eu.int/comm/enlargement/report_11_00/index.htm
European  Commission  DG  Enterprise  (2001),  report  on  ‘Innovation  policy  issues  in  six  applicant
countries:  The  challenges’  by  ADE  S.A.,  University  College  London  school  of  Slavonic  and  East
European studies, the Maastricht economic research institute on innovation and technology
EU-CEEC  Joint  High  Level  Committee  Progress  Report,  CEEC  Country  Reports  since  the  Third
EU/CEEC  Information  Society  Forum,  European  Ministerial  Conference  ‘Information  Society:
Accelerating European Integration’, Warsaw, 11-12 May 2000
Eurostat (2000a), European Union FDI with Candidate countries: and overview, Statistics in focus
Eurostat (2000b), Key data on education in Europe
Eurostat (2000c), R&D and innovation statistics in candidate countries and the Russian Federation
Eurostat (2001), R&D expenditures and personnel in Europe and its regions, Statistics in focus
European  Training  Foundation  (2000),  Vocational  education  and  training  in  Central  and  Eastern
Europe, Key indicators – 2000
Filacek, A., J.Loudin, S.Provaznik (1999), Background Papers of the Workshop on ‘Education, training
and skills in the pre-accession countries’, 11-12 Nov. 1999, Vienna, IPTS
Gavigan,  J.,  M.Ottitsch,  S.Mahroum,  Knowledge  and  learning  –  towards  a  learning  Europe,  IPTS
Futures Project, Dec. 1999
Gjellerup,  Pia  (1999),  Minister  for  Trade  and  Industry,  in  “  An  ethical  Foundation  for  Genetic
Engineering Choices”, The Ministry of Trade and Industry, Denmark, 1999
Gourova,  E.,  C.Herrmann,  M.Bogdanowicz,  J.C.  Burgelman,  Information  and  Communication
Technologies,  Draft  issue  paper,  Enlargement  Futures  ICT  meeting,  Seville,  5-7  September  2001,
http://www.jrc.es/projects/enlargement/
Grant Agency of the Czech Republic, http://www.gacr.cz/gacr/english/oborya.htm
Haug, G., Ch. Tauch (2001), Trends in Learning structures in Higher Education (II), Follow up Report
2001,
Prague 
for 
prepared 
http://www.salamanca2001.org

of  March/May 

Conferences 

Salamanca 

November 

countries, 

candidate 

and 

the 

the 

of 

75

(reports 

for  Malta,  Turkey,  Cyprus),

Havas, Attila (1999), Background Papers of the workshop on ‘Innovation Systems in the Enlargement
Countries’, Sevilla, 13-14 Dec. 1999
Howells,J.,  P.Cunningham,  M.Boden  (2000),  PREST  University  of  Manchester,  Thematic  report
‘Industry-science  relations’  for  European  trend  chart  on  innovation,  European  Commission  DG
Enterprise
Illnerova,  Helena  (2001),  Czech  Academy  of  Sciences,  Conference  “An  enlarged  Europe  for
researchers” (Brussels, June 2001)
IPTS,  Background  Papers  of  the  Workshop  on  ‘Innovation  Systems  in  the  Enlargement  Countries’,
Sevilla, 13-14 December 1999
IPTS,  Background  Papers  of  the  meeting  of  the  Thematic  Network  on  Foresight  in  the  Enlargement
Countries, Nicosia, 7-9 April 2000
IPTS, A Prospective Dialogue on EU-Enlargement: Science, Technology and Society, Berlin, 3-4 June
1999
IPTS,  South  Eastern  Mediterranean  Partners 
http://www.jrc.es/projects/euromed/
IPTS  Working  Paper  -  Emerging  Priority  Research  Themes  for  Europe,  December  2000,
http://priorities.jrc.es/
Jasinski, A. (1997), Academy-industry relations for innovation in Poland, Steep discussion paper No.41,
http://www.sussex.ac.uk/spru
Kaps, T., R.Vaikmäe (1999), Opinion on the current status of Estonian educational system, Background
Papers of the Workshop on ‘Education, training and skills in the pre-accession countries’, 11-12 Nov.
1999, Vienna, IPTS
Knell, Mark (1998), Technology and growth in Central Europe, Vienna institute Monthly report, N8-9,
Summer, WIIW, Vienna
Korka,M.  (1999),  Background  Papers  of  the  Workshop  on  ‘Education,  training  and  skills  in  the  pre-
accession countries’, 11-12 Nov. 1999, Vienna, IPTS
Kubielas and Yegorov (2000), Strategic alliances and technology transfer in  CEE, Science and Public
Policy, August 2000
Kwiatkoski,  S.  (1999),  Background  Papers  of  the  Workshop  on  ‘Education,  training  and  skills  in  the
pre-accession countries’, 11-12 Nov. 1999, Vienna, IPTS
Meske,W. (1998), Institutional transformation of S&T systems in the European economies in transition:
Comparative analysis, Research Group Science Indicators, P 98-403 WZB, Berlin
Meske, W. (1999), From system transformation to European integration: The specific situation of S&T
in  the  Pre-accession  countries,  prepared  for  the  4th  summering  S&T  forum,  Vienna,  3-5  Dec.  1999,
WZB, Berlin
Meske,W. (2000), Three phase model, Science and Public Policy, August 2000
Ministry of Economy, Bulgaria, http://www.mi.government.bg
Ministry of Education, Hungary, http://www.om.hu/jg.html
Ministry of Economy, Lithuania, http://www.ekm.lt/
Ministry of Transport and Communications,  Co-ordination  Council  on  IS  issues/documents,  Bulgaria,
http://www.mtc.government.bg/en/cpt/default.htm
Ministry of Foreign Affairs, Turkey, http://www.mfa.gov.tr/grupc/cg/04.htm
Mosoni-Fried,J. (1999), Background Papers of the Workshop on ‘Education, training and skills in the
pre-accession countries’, 11-12 Nov. 1999, Vienna, IPTS
Mueller  and  Etzkowitch  (2000),  S&T  human  resources:  the  comparative  advantage  of  post-socialist
countries, Science and Public Policy, August, 2000
National Agency for Development of SME, Slovakia, http://www.nadsme.sk
OECD (1998), Human capital investment
OECD (1999), Science, technology and industry scoreboards
OECD (2000a), Reviews of national policies for education, Estonia
OECD (2000b), Reviews of national education policies for education – Romania
OECD (2000c), Science, technology and innovation Outlook

76

OECD  (2001),  Science,  technology  and  industry  scoreboards,  http://www1.oecd.org/publications/e-
book/92-2001-04-1-2987/
Planning Bureau, Cyprus, http://www.planning.gov.cy/
Program of the government of Lithuania, http://www.lrvk.lt/anglu/home_anglo.htm
Radosevic,  Slavo  (1999),  Science,  Technology  and  Growth:  Issues  for  Central  and  Eastern  Europe,
SPRU,  1999  (Summary  of  the  Project:  “Restructuring  and  Reintegration  of  Science  and  Technology
Systems in Economies in Transition”)
Radosevic, Slavo (2001), EU accession and challenges of innovation based catching-up of Central and
Eastern Europe, Workshop ‘Catching up and EU accession – prospects for first and second wave new
members’, Stockholm, 3-5 May 2001
Rhode, Barbara (2000), Mapping of S&T Excellence in Europe, presentation to the "High-level Group
of Experts on Benchmarking, Excellence, Co-ordination of National Policies) , 23 November 2000
Romer  (1998),  THE  Soft  revolution,  Bank  of  America  roundtable  on  the  Soft  revolution:  achieving
growth by managing intangibles, Journal of Applied Corporte Finance, vol. 11, num. 2, 1998
Romijn, H. (1998), Technology development in transition – the case of Hungarian industry, University
of Oxford, 1998
Sadowski, B.M. (2000), The myth of market dominance: telecommunication manufacturing in Poland,
Hungary and the Czech republic -–a case study, Telecommunications policy, 24, 2000, pp. 323-345
Sellin, Burkart, Fons van Wieringen et al (2000), Scenarios and Strategies for Vocational Education and
Training in Europe, European synthesis report on phase I, Amsterdam, Cedefop: European Centre for
the Development of Vocational Training, Thessaloniki/Greece
Statistical yearbook of Turkey, 1999
Statistical Yearbook (Universities) of the Institute for Information in Education, Prague 1990-97
Sylins,  Andrejs  (1999),  Prospective  Dialogue  on  EU-Enlargement:  Science,  Technology  and  Society,
Berlin, 1999
Shepard, Iain (2000) ‘Science and governance in the European Union – A contribution to  the  debate’
edited by Iain Shepard, JRC-ISIS (March 2000), http://www.jrc.es/sci-gov/docs/scandg-v3012.doc
Tuomi, Ikka (2001), Emerging Research Topics on Knowledge Society TEKES, 2001
http://europa.eu.int/information_society/eeurope/news_library/documents/index_en.htm
Technology Development Foundation of Turkey, http://www.ttgv.org.tr/eng/eng_main.html
Umek,A.  (1999),  Background  Papers  of  the  Workshop  on  ‘Education,  training  and  skills  in  the  pre-
accession countries’, 11-12 Nov. 1999, Vienna, IPTS
UNDP (1998), National human development reports: Poland
UNDP (1999a), Latvian Human development report
UNDP (1999b), Human Development report for Central and Eastern Europe and the CIS
UNDP (1999c) National human development reports: Bulgaria, vol.I
UNDP (2000a), National Human development report – Slovakia
UNDP (2000b), National human development report – Lithuania
UNDP (2001), Human Development Report 2001, Oxford University Press, New York/ Oxford
UNESCO (2000a), Education for all, Central and Eastern Europe Synthesis Report
UNESCO (2000b), World education report (2000)
UNICEF (1998), Education for all, UNICEF, Florence
Weber,  M.,  W.Meske,  K.Ducatel,  The  Wider  Picture:  Enlargement  and  Cohesion  in  Europe,  IPTS
Futures Project, Dec. 1999
World Bank (1996), Development report 1996: from plan to market, NY
World Bank (1998/99), World development report
World Bank (1999/2000), World development report
World Bank (2000/2001), World development report
World Bank Institute (2001), Decetralizing Education in Transition Societies, Case studies from Central
and Eastern Europe, ed. Ariel Fiszbein

77

78

Annex I:
Participants

Panel members

Mr. Jiri BURIANEK
Coordinator EC-JRC, Brussels support services
European Commission
Belgium
e-mail: jiri.burianek@cec.eu.int

Dr. Jennifer CASSINGENA HARPER
Malta Council for Science and Technology
Malta
e-mail: jharper@mcst.org.mt

Dr. Dilek CETINDAMAR
Graduate school of management, Sabanci University, Istanbul
Turkey
e-mail: dilek@sabanciuniv.edu

Prof. Costas CONSTANTINOU
Department of Educational Sciences, Learning in Physics Group
University of Cyprus
Cyprus
e-mail: c.p.constantinou@ucy.ac.cy

Mrs. Zoya DAMIANOVA
Coordinator Innovation Relay Centre, Applied Research and Communications Fund,
Bulgaria
e-mail: zoya.damianova@online.bg

Mr. Bálint DÖMÖLKI
President
IQSOFT Intelligent Software Co. Ltd.
Hungary
e-mail: domolki@iqsoft.hu

Dr. Hans-E. HAGEN
Scientific Programme Officer, International Programme
The Wellcome Trust
United Kingdom
E-mail: h.hagen@wellcome.ac.uk

Prof. Rein KÜTTNER
Head of Division of Estonian Academy of Sciences
Head of Institute, Tallinn Technical University
Estonia
e-mail: Kyttner@edu.ttu.ee

79

Prof. Jerzy LANGER
Advisor to the President of the Polish Academy of Sciences
Institute of Physics
Poland
e-mail: langer@ifpan.edu.pl

Prof. Dr. Werner MESKE
Social Science Centre Berlin - WZB
Germany
E-Mail: Meske@medea.wz-berlin.de

Mr. Lajos NYIRI
CEO
ZINNIA Group L.P.
Hungary
e-mail: zinnia@mail.datanet.hu

Dr. Mary PHILLIPS
Scientific Programme Manager
International Biomedical Programmes, the Wellcome Trust
United Kingdom
E-Mail: m.phillips@wellcome.ac.uk

Dr. Boris PUKL
State Undersecretary, Dept. for Science - Engineering Sciences
Ministry of Education, Science and Sport
Slovenia
e-mail: boris.pukl@mszs.si

Mrs. Barbara RHODE
DG RTD
European Commission
Belgium
e-mail: barbara.rhode@cec.eu.int

Mr. Burkart SELLIN
Project Manager
CEDEFOP/Thessaloniki
Greece
e-mail: bs@cedefop.eu.int

Prof. Laimutis TELKSNYS
Head of Department, Institute of Mathematics and Informatics
Head of the Technology Committee of the Science Council of Lithuania
Lithuania
e-mail: telksnys@ktl.mii.lt

Dr. Matthias WEBER
Systems Research Technology - Economy -
Austrian Research Centres
Austria
E-Mail: matthias.weber@arcs.at

80

IPTS staff

Mrs. Paola DIPIETROGIACOMO
Futures Team
e-mail: paola.di-pietrogiacomo@jrc.es

Mr. Ken DUCATEL
Manager, Futures Project
e-mail: ken.ducatel@jrc.es

Mr. Gustavo FAHRENKROG
Head of Unit, Technology, Employment, Competitiveness and Society
e-mail: gustavo.fahrenkrog@jrc.es

Mr. James GAVIGAN
Futures Team
e-mail: james.gavigan@jrc.es

Mrs. Elissaveta GOUROVA
TECS Unit
e-mail: elissaveta.gurova@jrc.es

Ms Fabiana SCAPOLO
Futures Team
e-mail: fabiana.scapolo@jrc.es

IPTS Technical support

Miss. Sigrid Ertel, sigrid.ertel@jrc.es
Miss Sabine Najib, sabine.najib@jrc.es

81

82

Annex II:
Background – Science and Technology priorities

Annex II-1: Foresight derived Science and Technology priority areas

Cross-cutting enabling areas of S&T

I. Information & Communication Technologies

The  main  emerging  S&T  opportunities  relate  to  the  take-off  of  developments  in  the  areas  of
ubiquitous  computing  &  communications  and  ambient  intelligence,  and  the  need  to  develop
intelligent user interfaces. The key trend breaks in the coming years relate to:

•  Miniaturisation and the slowing down of Moore's law
•  Massive demand for bandwidth
•  Huge leaps in system and device complexity and intelligence
•  A move towards mass customisation of ICTs

1.  Enabling ICTs for Knowledge Systems, core ICT components & devices and industry
specific applications/ platforms/ content; Fixed and mobile access networks and devices,
Software engineering, methods and products;

2.  Ubiquitous Computing, Ubiquitous Communications &  User-Friendly  Interfaces  Ambient
power  sources;  Miniaturisation;  Sensors,  micro-systems,  embedded  systems;  Complex
networks,  software,  functionalities,  behaviour;  Dependability,  fault  tolerance,  graceful  service
decline;  Computing  and  networking  architectures;  Cognitive  and  human  systems  models
(Artificial  intelligence)  and  understanding  of  the  cognitive  and  social  effects  of  the  wireless
society. Design and development of augmented objects

II. Gene Science and Technologies

Transition to the post-sequencing genomics era will see the development and implementation of
new  therapies,  diagnostic  tools  and  improved  health-management  strategies.  The  growing
knowledge on the function of human genes and the role of these genes in maintaining health,
causing diseases and determining the ageing process will have a high impact on human health,
health  care  system  structure  and  organisation,  and  pharmaceutical  sector  development.
Advances in plant and animal genetics will modify agriculture and husbandry techniques, with
new environmentally sound production processes. Major trend breaks:

•  The  completion  of  human  genome  sequencing  will  radically  change 

the

pharmaceutical paradigm, from “bio-chemistry” to “pharmaco-genetics”.

•  Developments 

in  bio-informatics,  broadly  defined  as  computer-assisted  data
management tools, to store, access and analyse the data generated from investigation of
biological phenomena.

•  Production of plants and animals with pre-determined genetic characteristics (pest and

drought resistant, with high feed conversion index, etc.)

• 

3.  Post-genomics and bio-informatics Proteomics; Transgenic animal models; pathogen

genomes; Molecular epidemiology (especially about multifactoral diseases); Integrative biology;
Pharmaco-genetics; data management tools; database and sequence analysis software
development: research on IPR issues.

83

III. Nanoscience, Nano & Precision technologies

Nanoscience is a whole new emerging cross-disciplinary field drawing on physics, chemistry,
medicine  and  biology,  constituting  in  its  own  right  a  major  new  trend.  It  has  a  significant
'materials  science  and  engineering'  component  covering  techniques  and
nano-scale 
instrumentation  for  nanofabrication  of  ultrathin  layers,  manipulating  material  and  building
molecular  architectures  and  lateral  structures  down  to  atomic  scale,  but  also  nano-phase
the  array  of  potential
materials  with  novel  macroscopic  properties.  In 
nanotechnologies, important 'systems'-related challenges are also raised regarding integration
and interconnection different nano-scale features to form functional components.

terms  of 

4.  Nano-scale  fabrication  and  manipulation  Atomic  scale  layers  &  lateral  structures  (writing
techniques, particle beams, self-organisation,..), ultra-precise surface figuring, analysis techniques of
vertical/  horizontal  structures,  boundary  layers  &  surfaces;  Extreme  Ultraviolet  Lithography
(affordable 11 nm or 13 nm x-ray sources, x-ray optics) printing, e-beam, self-assembly techniques.

5.  Novel Materials nanomaterial  & molecular  architectures  with  novel  macroscopic  properties;  nano-
porous cavities and tubes for filtering, adsorption and storage of hydrogen, membranes for fuel cells,
catalysts,  nanodispersions  for  coating  and  hardening,  layers  for  LCDs,  antireflex  surfaces,
photovoltaics etc.

6.  Nanotechnologies & systems integration & interconnection of different nano-scale features to form
functional components, nano-scale devices & systems; complex combinations of mechanical, optical,
electrical or chemical characteristics, of organic, inorganic or biological molecular structures; potential
technologies in medicine, precision engineering, electronics, etc. - micro-invasive surgery & implants,
artificial retinas, artificial antibodies, new lasers, millimetre wave components

IV. Advanced Materials

New  materials  are  are  fundamental  enablers  of  almost  all  other  enabling  technology  areas
(especially  ICTs  and  biotechnologies)  and  provide  the  basis  for  innovations  in  system
technologies such as transport,  energy, defence and aerospace.  Particularly important trends
are:

•  The moves from passive structural  and  active functional materials to multifunctional

materials and smart materials.

•  The  need  for  materials  that  lend  themselves  to  sustainability  requirements  -  longer

service life, reusability, biodegradability.

•  New  materials  processing  techniques  such  as  molecular  design,  nano-level  self

assembly, three dimensional printing.

•  Radical  changes  in  demands  on  materials  in  health  care  (e.g.  biocompatibility,
biomimetic materials for prosthetics), in construction, automobiles and aerospace (e.g.
lighter  and  stronger  materials  for  frames),  in  computing  devices  (VLSI,  optical
processing, quantum computing).

• 

7.  Sustainable Materials - recovery, re-use & recycling of complex materials, new renewable
biological/ agricultural material feedstocks, fibres, lubricants, etc.; re-use of materials in
renewing the built environment

8.  Functional Intelligent Materials -  new  alloys,  plastics,  ceramics,  composites,  for  health-care
and  industrial  applications.  more  efficient  and  user-friendly  with  longer  lifetimes.  are  more
resistent  to  corrosion  and  chemical  effects;  programmable  responses  to  specific  stimuli.  E.g.
coded biomaterials with specific responses to specific biological environments.

84

V. Complexity & Complex Systems

Complex systems cover climate modelling, ecosystems under stress, interactions between social
financial  markets,  complex  product  and  production  systems,
and  natural  systems, 
transportation, energy and water supply, town and regional planning, engineering and software
development. Typical features include large number of components and interactions, the multi-
level/  multi-actor  character  of  the  phenomena,  dynamic  and  non-linear  behaviour,  the  time-
future
their 
criticality  of  actions, 
evolution/transformation, and a huge volume of information. Critical challenges include:

inherent  uncertainty  and  unpredictability  of 

• 

to  bridge  the  gap  between  fundamental  research  solutions  and  applied  areas  where
complex modelling is regarded as a key source of insight.

•  Dealing with complexity arising out of an increasing interconnection between different
systems. Examples include the much stronger coupling of the biological system to the
eco-system  via  GMOs;  the  coupling  of  industry,  energy  and  transport  systems  to
climate; or the coupling of IT to the human brain and psychological system.
the development of managerial and organisational approaches in  relation  to  complex
product  and  production  systems  in  defence,  aerospace  and  other  sectors  -  through
knowledge and soft technologies rather than modelling, chaos and complex software.

• 

• 

9.  Better understanding of complexity: stability, control, reliability under changing
circumstances,  improving confidence in systems modelling; sensitivity analysis

10.  Generic tools and components modelling & design, simulation, modular approaches for

system design, and both specific and generic components for applications

11.  Computing infrastructure massive computation power, hardware for simulation, infrastructure

& platforms

12.  Data retrieval and system monitoring tools for dealing with vast amounts of information

retrieval and collection, intelligent retrieval, reducing interdependencies (the butterfly effect)

13.  Management of complex systems Reliability and dependability; self-organising, self-repairing

systems, risk management

VI. Fundamental Sciences (not developed)

85

Demand-driven application areas of S&T

VII. Knowledge Sciences and Technologies

This refers to instruments, routines and know-how for organisations to function effectively and
for  full  participation  of  citizens.  Efficient  forms  of  organisation  and  knowledge  management
(creation, storage and retrieval), education and cultural technologies will have a critical role,
enabling individuals and enterprises to cope with increasing levels  of complexity.  Knowledge
sciences and technologies, involve a strong ICT dependence, but also include many other softer
areas of S&T which are more tacit and contextual or human-factor dependent. Overall drivers
affecting this area of technology include:

•  mechanisms and regulations to assure quality and protection of knowledge and IPRs in

order to underpin value creation.

•  effective and widely useable soft (organisational and societal) technology.
•  describe  and  understand  mechanisms  of  knowledge  formation, 

transfer  and
exploitation  -data  mining,  data  warehouse,  ‘thinking  tools’  based  on  dynamic  and
distributed databases.
Tools for new forms of business organisation, especially for SMEs.

14.  Knowledge Management & Learning Organisations  generic – Techniques related to

business processes, organisational structures, training, etc. changing organisational boundaries
- networks & distributed enterprises, B2B, B2C; Security, trust & confidence, and
personalization; Technologically enhanced production, distribution and consumption. Methods
of production and delivery. Techno-intelligent organisations. Models for learning. Business
ecosystems.

15.  Soft Technologies specific - Systems engineering, Distributed database management,

Knowledge filtering and delivery; Datamining/ warehousing; Content creation and storage tools,
Agent technologies, Sensors/ actuators, Integrated devices (eg product & service tagging)
(Tacit) Knowledge creation, storage, retrieval and loss. Critical interfacing and consumption
patterns. Customisation methods. Needs analysis. Marketing. Simulation

16.  Education & Learning Technologies e-learning platforms (mobile and fixed access to info.

and guidance) virtual teachers & mentors customised to specific learner needs; laboratory use
(collaborative working groups); learning appliances (voice/ text/.., & behaviour recognition);
understanding of the learning process (neuronal biosensors); organisational aspects (education
at large); knowledge codification

17.  Media Content & Cultural Technologies Language technologies; Media content development
and human-machine interfaces; Tangible & intangible heritage technologies, both ICT-based
and traditional

18.  Defence & Security Technologies Space-based monitoring and observation; Encryption,
data-mining and security management systems; Demining technology; Trust technology

86

VIII. Health Sciences and Technologies

The changing health demands of citizens are driven by rising expectations of standards of living
and  longevity,  the  ageing  of  the  population  and  the  hopes  generated  by  highly  publicised
developments  in  biology  and  genetics  (the  research  implications  of  which  are  covered  below
under gene technologies). Apart from genetics, major breakthroughs are expected in other areas
such as tissue and organ engineering, surgery and the treatment of disease. In terms of health
systems, rising costs and the logic of healthier lifestyles are leading to a switch in emphasis from
reactive care to preventative care in health-related policies, extending the boundary to the fields
of nutrition and education. New organisational principles and management tools will need to be
developed  to  help  maintain  health  systems  working  efficiently.  Research  should  not  only  be
aimed  at  developing  new  sophisticated  treatments  but  also  to  achieve  decreasing  costs  for
methods to be widely applied.

•  Application of informatics and telematics in clinics is still in its infancy.
•  Changes in working conditions, lifestyles and food production systems will lead to the
emergence of new diseases, and re-emergence of old ones in more virulent form.

• 

19.  Gerontology - Gerontechnology Ageing population - Assistive technologies & home-based
nursing care technology; Patient friendly diagnostic devices for tele-monitoring of chronic
illnesses prosthetics techniques

20.  Preventative Health Care & Nutrition Changing lifestyles and food production systems, health

education instruments and techniques; functional and therapeutic food; Organic farming;
calibrated drug use & over-medication avoidance

21.  Health-care Systems & Management Tools experimenting, demonstrating and benchmarking
new practices and organisations in health services delivery corresponding to a prevention
paradigm; standardisation in R&D of health care equipment; Organisational development -
transnational Tele-medicine, Risk management, risk benefits. IPRs for pharmaceutical
products; Information systems for health and health knowledge management EU-wide;
Improved early warning systems for disease & epidemic control

22.  e-Health ICTs for health care Bio-sensors and bio-electronics; Telemedicine and

telediagnostic; Health data-storage and data-retrieval; health privacy and security; Imaging and
computer assisted surgery; Medical decision support system.

23.  Tissue Engineering Cellular biology stem-cells; pre-natal care & 'repair' 'spare parts' -, reuse,

tissue engineering artificial organs; xeno-transplantation;

24.  Biomedical Research: biomaterials; treatments for new and re-emerging diseases & for non-

communicable diseases;

25.  Health  Risks  Research  Medicine  &  the  food  chain  risk  and  precaution-related  research  -

(BSE,  GMOs, new treatments/ drugs/ therapies/, environmental causes)

26.  Research on Risks to Privacy & Personal Integrity medical information risk and precaution-
related  research  -  (genetic  information,  hereditary  diseases,  medical  records,  cloning,
insurance, ethical concerns)

87

IX. Technologies for a Sustainable Economy

Many sustainability and environmental issues require. Sustainable economy issues relating to
production,  distribution  and  consumption  concerns  also  have  many  research  implications  for
both  direct  R&D  action  and  enabling  and  cross-cutting  technologies  (materials,  ICTs  and
complexity). Three main lines stand out:

•  Sustainable  production  and  consumption,  which  refers  to  the  need  to  develop  new
socio-technical  systems  within  which  innovation,  growth  and  the  satisfaction  of
material and immaterial needs go hand in hand with environmental sustainability.
•  Management of natural resources and the environment in view of the impact of human
development on natural systems. Management here refers to local (e.g. aquatic systems
at catchment scale) as well as global systems such as the carbon cycle.

•  Managing risks and mitigating adverse effects of technological progress. This requires
a reduction of pollution together with a better understanding of its effects and higher
safety levels for citizens and workers.

• 

27.  Sustainable  Energy  Management  and  Supply  Alternatives:  Safe  efficient  generation,
transport,  storage,  transmission  &  utilisation;  new  infrastructures  for  electricity  and  fuels
(incl. H2), deregulated market logistics & demand management, sustainable energy services
and  utilities  design,  socio-economic  and  pre-normative  research  for  policy  &  technology
diffusion. New renewable  fuels  &  sources  of  energy  (solar,  photovoltaic,  wind,  bio-energy,
geothermal), the H2 economy, embedded generation (micro-turbines, hybrids, fuel cells…),
clean electricity (zero emission power plants, CO2 capture & sequestration), next generation
& evolutionary nuclear energy, nuclear waste management

28.  New  infrastructure,  logistical  and  control  systems  for  sustainable  transport:  high
speed  rail,  transhipment  and  material  management  facilities,  intermodality  solutions,  new
transport  forms  designed  to  meet  urban  demands; Safety  Techniques:  integration  of
passive and active safety elements; traffic management, fleet management, engine control
systems,  convoy  driving,  passenger  information  systems,  distributed  dynamic  databases
and  middleware,  standards  integration  systems,  GPS,  tracking  and  tracing,  safety
techniques

29.  Sustainable  Production  &  Consumption  Eco-efficiency  demonstrators  &  experiments;
technology  enhanced  service  models  that  lead  to  dematerialisation;  revalorisation-friendly
product design; separation, reclamation and recovery techniques.

30.  Socio-Technical  System  Design  for  Sustainability:  systemic  multi-factor  design  tools,
organisational  research  on  interfacing  systems  and  structures,  complex  systems  and
modelling,  research  on  economic  incentives/pricing  systems;  new  holistic  forms  of  urban
governance with citizen participation in decision-making

31.  Understand, Mitigate and Adapt to Climate Change and other Environmental Threats:
observation, assessment, and modelling of climate-change and eco-systems; environmental
geographical information systems; remote sensing; integrated modelling of complex natural
and anthropogenic systems;  anticipation of climate-change effects, of natural & man-made
disasters; controlling risks from chemicals and manipulated biological materials, eco-system
&  biodiversity  preservation,  experimental  platforms for  the  management  of  ecosystems  as
natural  resources,  carbon  sequestration,  prevention  of  floods  and  other  man-made  and
natural disasters, prospective analysis of socio-economic repercussions

88

X. Social Sciences in Support of Building Europe

Europe  is  confronted  with  a  number  of  challenges  that  originate  decisively  from  the  socio-
political realm. An enlarged EU needs new requirements for an efficient European multi-level
governance structure and it needs to define its borders to the East and South, developing new
concepts for the relationships with neighbouring countries. Demographic change and migration
will be key challenges for both European and national policy. External relations are developing
into an ever more important concern of the Union, in need of underpinning by research.
Europe will be then confronted in the future with a higher degree of diversity within its borders,
culturally,  politically,  and  economically.  The  diversity  of  values  may  in  the  future  be
complemented by growing intra-European mobility of people & the media.
Changes  in  the  regional  balance  and  cohesion  of  Europe,  especially  as  they  are  affected  by
technological developments in ICTs will create a significant requirement for supporting socio-
economic research. Together they raise important questions about the creation of an effective
internal labour market in Europe.
Both social sciences and humanities have the potential to provide insights and thus support
to policy in order to help build Europe, especially by working across disciplinary
boundaries.

32.  Social science/humanities Implications of The EU Project governance, citizenship &

participation; cohesion Values research; extremism and crime; multi-cultural environment in
Europe; principles of political systems

89

Annex II-2: S&T priorities in recent major prospective studies

Case 1: The Millennium Project

The  Millennium  Project  is  an  on-going  global  participatory  project  of  the  American
Council for the United Nations University involving over 550 futurists, scholars, business
planners,  and  policy  makers  worldwide  from  50  countries.  In  the  following,  we  list  a
small  sampling  of  some  of  the  long-range  S&T  development  issues  which  the
Millennium Project has identified in the third year of its research.116

15 global challenges were analysed with explicit S&T implications in six of them. Here
we just list some of the S&T prospects identified in relation to Challenge No. 14 How
can  scientific  and  technological  breakthroughs  be  accelerated  to  improve  the  human
condition?

The most significant characteristic of S&T developments identified is the extent to which
progress is driven by cross disciplinary invention, research collaboration at a distance and
rapid dissemination of information. These synergies have been accelerated by the global
convergence  of  IT  and  communications  technologies  and  continue  to  add  NEW
FRONTIERS of which the following five were highlighted:
•  Nanotechnology, which is felt by many to hold the highest prospects for tomorrow's

breakthroughs.

•  Biotechnology,  and  particularly  the  aftermath  of  the  mapping  of  human  and  plant

genomes

•  Planetary astronomy and space research, including search for other life forms and

advanced research in biology and physics necessary for human space flight

•  Cognitive science, including the development of a new psychology with insights into
the  nature  of  memory,  self-consciousness,  education,  propaganda,  disease,..  or
decision science, bringing together understanding of how economics, risk-behaviour,
and intuition combine to make decisions, and

•  Quantum computing which is the development of computer technology based on the
principles  of  quantum  theory  (i.e.  that  which  explains  the  nature  and  behaviour  of
energy and matter on the quantum - atomic and subatomic - level). Development of a
quantum computer would mark a leap forward in computing capability far greater than
that from the abacus to a modern day supercomputer, with performance gains in the
billion-fold realm and beyond.

Case 2: Global Trends 2015

The following list of future S&T related prospects was compiled from two different
sources117. They are given in the form of predictive statements or trends as is often
the  case  in  scenario-based  prospective  studies.  The  statements  are  the  views  of
experts,  reflecting  the  techno-optimistic  view  that  is  typical  of  the  scientific
community. The coverage is not comprehensive but the sampling provided reflects
some of the long-term 'scientific' frontiers suggested by the millennium project, plus
a sampling of more issue-specific and technological trends.

116 1999 State of the Future: Challenges We Face at the Millennium, American Council for the United Nations (AC/UNU); J C
Glenn and T J Gordon (2001) The Millennium Project: Challenges we face at the Millennium, Technological Forecasting and
Social Change 66, pp. 129-312
117 CIA (US) (December 2000), Global Trends 2015: A Dialog about the Future with non-government experts
Joseph Coates et. al. (1997), 2025 Scenarios of US and Global Society Reshaped by Science and Technology, Oakhill Press

90

                                                          
•  The  integration  of  existing  disciplines  (nanotechnology,  materials  science,
biotechnology,  information  technology)  to  form  new  ones,  will  give  rise  to  a
dramatic increase in innovation.

•  The time between discovery and application of scientific advances will continue

to shorten.

•  Many  new  IT-enables  devices  and  services  will  emerge,  diffuse  rapidly,  and
decrease in cost in line with increase in demand. Miniaturisation will continue and
the  widespread  integration  of  ICT  devices  into  all  sorts  of  products  will  see  the
emergence  of  so-called  ubiquitous  computing  or  embedded  intelligence.  The
systems integration competence needed to exploit this trend is strong in Europe.

•  Local-to-global 

internet  access  holds 

the  prospect  of  universal  wireless

connectivity via hand-held devices and low-cost, low-altitude satellites.

•  Chemicals produced in modern biotechnology based production plants  (protein,
polymer  synthesis,  bio-materials)  will  account  for  up  to  20  %  of  all  bulk
chemicals in 2010.

•  Medical  applications  of  biotechnology  will  remain  costly  and  available  to

wealthy segments of society.

•  Materials  technology  will  give  rise  to  widely  available  products  that  are  smart,
multifunctional,  environmentally  compatible,  more  customisable.  These  will
benefit manufacturing, logistics and personal lifestyles.

•  Nanotechnology developments are  likely to  change the  way almost  everything  -
from  vaccines,  to  car  tyres  to  computers  -  is  designed  and  made.  The  global
economy will continue to become more energy efficient (traditional industries and
transportation).  The  most  dynamic  growth  areas  in  services  and  the  knowledge
fields are less energy intensive than the fields they replace.

•  Fossil fuels will remain the dominant form of energy in spite of global warming

concerns.

•  Efficiency  of  solar  cells  will  increase  and  genetic  engineering  will  improve  the

prospects for the large-scale use of ethanol and hydrates.

•  Localised  environmental  problems  such  as  high  concentrations  of  pollutants  in
air,  waterways  and  land  will  be  managed  and  are  unlikely  to  constitute  a  major
constraint on economic growth and improving health standards.

•  As transport demands grow, congestion costs (presently 2 % GDP) will continue

to rise.

Case 3: Strategic Futures

The Performance and Innovation Unit of the UK Government's Cabinet Office recently
published an analysis of 50 strategic futures studies completed in the last five years118.
The report identifies dozens of trends which are set to shape the global future and that
might  be  expected  to  affect  UK  policy  over  the  coming  decades.  It  grouped  them
thematically into the following six areas:
•  Demographics
•  Environmental Change
•  Economics
•  Science and Technology

118 Strategic Futures Thinking: meta-analysis of published material on Drivers and Trends by S Davis, B Bolland, K Fisk and M
Purvis (DERA) for the Performance and Innovation Unit, Cabinet Office, UK (DERA/CDA/S/152 (see http://www.cabinet-
office.gov.uk/innovation/2000/strategic/Strategic_mainpage.shtml)

91

                                                          
•  National and International Governance
•  Perceptions, Beliefs, Values and Attitudes

The report points out that the S&T driver holds a place of particular importance as the
trends in this area will facilitate many trends and events in the other areas. It also points
out  that  S&T  along  with  demography  are  the  most  reliable  drivers,  as  future
developments  can  be  often  derived  from  current  developments.  Also,  the  fact  that
specific technological goals are being actively pursued makes some of the S&T trends
unique.

A list of eleven trends and five wild cards were highlighted:

1. Growth  of  IT/communications  technology  (increased  technological  globalisation)

and greater sophistication of computers.

2. Access  to  technology:  Increasing  access  to  IT  and  communications  technology  or
creation  of  a  ‘knowledge  gap’  as  information  access  is  restricted  to  those  who  can
afford it.

3. Increasing  reliance/use  on  IT/communications  technology  in  business,  medicine,

industry and leisure.

4. Increasing  use  of  biotechnology  (including  genetic  engineering),  particularly  in

medicine.

5. Increasing use of artificial intelligence.
6. Increasing use of nano-technology and miniaturised technologies.
7. Greater reach of the media.
8. Increasing  reliance  on  IT/communications  technology  in  western  military

(especially the US).

9. Greater  use  of  ‘asymmetric’  military  technologies  in  developing  countries  and  by

paramilitary groups.

10.  Use of vastly improved, more robust and renewable materials.
11.  Continuing US dominance in the field of technological innovation.

The 'wild card' events listed were:

1. Viruses become immune to all known treatments
2. Self-aware machine intelligence
3. Sweeping medical breakthrough is perfected
4. Faster than light travel
5. Foetal sex selection becomes the norm

Case 4 Emerging Thematic Priorities

The final study we cite is a detailed expert-based secondary analysis of national foresight
studies with the specific aim of distilling out from all the material the main  topics and
issues where research activities could or should be developed or continued across Europe.

First of all, we point out that in recent years in Europe, there has been a trend in research
policy away from a technology driven to a issue119-based specification of objectives. This
is revealed by the themes emphasised in recent national foresight studies, which are being
used to inform research policy.

119 Socio-economic issues and problems

92

                                                          
The analysis of emerging S&T priorities from a European perspective based on national
foresight studies resulted in the identification of ten priority areas120 of S&T for Europe
(see more details in Annex II-1):

Table A1: Priority S&T areas for Europe

cross-cutting enabling areas of S&T:

Information and communication technologies

1. 
2.  Gene science and technologies
3.  Nanoscience, nano- and precision technologies
4.  Advanced materials
5.  Complexity and complex systems
6.  Fundamental sciences

demand-driven application areas of S&T
7.  Knowledge science and technologies
8.  Health sciences and technologies
9.  Technologies for sustainability
10.  Social sciences in support of building Europe

The  identification  of  these  areas  was  linked  to  important  or  emerging  trend  breaks
presenting new challenges and opportunities.

•  Trend  breaks  can  be  bottom-up,  emanating  from  basic  research  and  associated
with new enabling areas of S&T (biogenomics) or new multidisciplinary  fields
(nanotech).

•  Trend  breaks  can  also  arise  from  paradigm  shifts  in  practice  (knowledge  &
services  dominated  manufacturing,  preventative  health-care,  precautionary
research). These have much more to do with the ways in which S&T is applied
and used in social and economic contexts.

Opportunities  can  present  themselves  in  areas  where  leadership  positions  need  to  be
maintained  or  built  up.  Such  S&T  priorities  are  strongly  related  to  the  creation  of
complementary  competencies  to  maintain  and  develop  technological  leadership.  For
example,  ubiquitous  computing  calls  on  a  range  of  skills  in  hardware,  software  and
communications fields and other fundamental enabling technology fields (e.g. complexity,
advanced materials, nanotechnologies).

Overall,  we  see  that  the  most  prominent  and  recurring  themes  through  the  other
studies, are also reflected in the Foresight analysis as one would expect. However, as
we move on to consider the situation of S&T in the PACs, we must remember that the
themes and issues listed above refers to the S&T frontiers, which in the context of any
country, not just the PACs, is only part of the picture regarding S&T activities.

120 IPTS Working Paper - Emerging Priority Research Themes for Europe, December 2000,  http://priorities.jrc.es/

93

                                                          
Annex III:
Science and Technology – framework and priorities in pre-accession countries

The full annex with country background information could be found on Enlargement Futures web site of IPTS http://www.jrc.es/enlargement/

Table A2: Selected indicators for R&D

Country

Bulgaria
Cyprus
Czech
Republic
Estonia
Hungary
Latvia
Lithuania
Poland
Romania
Slovakia
Slovenia
Turkey
EU-15
Finland
Greece
Italy
Portugal
Japan
US

R&D
expend. in
mln. Euro2
1998
65
19
630

29
285
24
55
1022
184
156
228
8253
141200
3335
542
10822
582
102555
202172

R&D
personnel2

Scientists & engineers in
R&D per 1 000 0001

patent applications
residents1

patent applications
nonresidents1

GERD as % of GDP2

% of GERD financed by industry2

1998
19116
564
23740

4914
20315
4437
12847
84510
52454
16461
7985
:
861210
26483
10972
76056
13607
604438
964800

(1981-95)
4240
n.d.
1285

(1987-97)
1747
209
1222

1995
370
n.d.
628

3296
1157
1165
1278
1083
1382
1922
1998
209
:
3675
774
1303
599
5667
3732

2017
1099
1049
2028
1358
1387
1866
2251
291
:
2799
773
1318
1182
4909
3676

16
1117
210
106
2598
1811
273
318
206
:
2533
452
1625
96
335061
127476

1997
400
n.d.
601

18
774
163
125
2401
1709
234
285
233
:
4061
53
2574
92
351487
125808

1995
16953
n.d.
19382

14751
19770
16140
15882
19491
16856
17659
16267
1506
:
20192
44697
63330
58605
53896
107964

1997
27600
n.d.
29976

26626
29331
26860
26673
30137
27346
27973
27162
27985
:
105376
82390
88836
106595
66487
110884

1995
0.6
0.18
1.15

0.63
0.75
0.52
0.48
0.75
0.68
1.00
1.71
0.383
1.90
2.29
0.81
1.00
0.57
2.77
2.48

1997
0.52
n.d.
1.16

0.60
0.74
0.43
0.57
0.72
0.58
1.18
1.42
0.493
1.79
2.72
0.82
0.99
0.63
2.89
2.55

1998
0.59
0.23
1.27

0.62
0.68
0.45
0.57
0.73
0.50
0.86
1.485
0.50
1.86
2.89
0.90
1.02
0.65
3.03
2.58

1995
n.d.
83.6
63.1

12.9
38.4
20.5
21.7
31.5
30.1
60.4
45.5
30.83
52.9
59.54
n.d.
41.74
19.54
72.34
60.44

1997
22.9
n.d.
62.8

n.d.
n.d.
23.8
5.5
39.4
81.4
75.6
53.0
41.83
53.9
62.94
n.d.
44.34
21.14
73.44
64.34

1998
18.7
13.9
64.6

19.6
38.4
21.0
1.8
41.5
76.7
65.8
52.65
41.8
63.7
63.9
20.2
43.9
21.2
73.4
66.7

Source: 1 - World development indicators, 2 - Eurostat, 3 – State statistical Institute of Turkey 1999, 4 – OECD (1999), 5 – Statistical office of Slovenia, 2001

94

Table A3: Overview of innovation priorities and measures by Action Lines

Priority areas and sub-areas
I. Fostering an Innovation Culture
I.1. Education and initial and further
training
I.2. Mobility of students, research workers
and teachers
I.3. Raising public awareness and
involving those concerned
I.4. Innovation and management of
enterprises
I.5. Public authorities
I.6. Promotion of clustering and co-
operation for innovation
II. Establishing a Framework
conducive to Innovation
II.1. Competition
II.2. Protection of intellectual and
industrial property
II.3. Administrative simplification
II.4. Legal and regulatory environment
II.5. Financing of innovation
II.6. Taxation
III. Gearing Research to Innovation
III.1. Strategic vision of research and
development
III.2. Strengthening research carried out
by companies
III.3. Start-up of technology-based
companies
III.4. Intensified co-operation between
research, universities and companies
III.5. Strengthening the ability of SMEs to
absorb technologies and know-how

FI GR IT PT BU CY CZ EE HU LI LV PO RO SV SL FI GR IT PT CY CZ EE HU LT LV PL RO SK SL

Ranking of innovation priorities

Number of innovation policy measures121

3

2

2

1

1
4

3
2

2
1
4
1

1

4

3

4

2

3

2

2

2

1
2

3
2

1
3
4
1

2

3

3

2-

3

2

3

1

1

1
2

2
2

5
1
3
1

5

3

2

3

3

2

2

3

3

1
3

1
2

3
1
4
2

1

3

3

4

2

3

2

2

1

2
3

1
3

4
3
1
5

1

1

2

2

4

3

2

1

3

2
0

2
2

1
2
4
2

4

3

4

3

2

1

1

1

1

1
1

1
1

1
1
1
1

4

3

4

2

15

4

1

4

2

1
1

4
3

4
4
2
2

1

2

1

2

2

2

3

1

3

1
5

-
-

4
2
-
-

2

7

1

6

3

4

5

1

3

0
4

2
1

2
3
3
1

4

0

1

3

3

1

3

4

4

3
4

-
1

-
-
1
-

1

-

6

4

8

5

1

3

4

3
3

3
3

2
3
2
2

2

1

1

1

1

4

5

1

2

2
3

1
3

2
3
2
2

1

1

3

3

2

1

1

1

1

1
1

1
1

1
1
1
1

4

3

4

2

15

4

3

3

1

0
3

2
3

3
3
3
2

2

1

2

2

3

3

3

5

3

4

2

4

5
2

1

3

1

6

5

9
1
21

7

7

4

13

3

4

14

17

5

12

1

2

4

1

2

1

3

4

1
1

2

1

5
1

7

3

5

6

1

1

3

1

3
1

1
2

6

2

1

5

3

2

3
1

2

1

2

4

1

1

1

2

1
1

1

2

2

1

1

1

1

1

1
2

1

1

1

1

2

5

1

1

5

4

1

1

1

1

1

1

1
1

2

1

2

1

1

1

1

2

1

Source: European Commission DG Enterprises (2000)

121 available in innovation database http://trendchart.cordis.lu/Datasheets/index.cfm?fuseaction=DatasheetOverview

95