WP10

Socio-cultural determinants of innovation in the food and drink sector TECHNOPOLIS

Nelly Bruno, Michal Miedzinski Alasdair Reid, Miriam Ruiz Yaniz

February 2008

INTRODUCTION .......................................................................................................................................... 5 1.1 1.2 1.3 THE FOUR CAPITAL APPROACH OF THE STUDY ........................................................................................... 5 METHODOLOGY ADOPTED ......................................................................................................................... 7 SOCIO-CULTURAL ENVIRONMENT AND INNOVATION: ESTABLISHING A RELATIONSHIP? ............................ 9

CULTURAL CAPITAL AND CONSUMER BEHAVIOUR ................................................................... 11 2.1 2.2 2.3 2.4 CULTURAL CAPITAL AT NATIONAL LEVEL ............................................................................................... 11 CULTURAL CAPITAL IN THE FOOD/DRINK SECTOR .................................................................................... 13 CULTURAL CAPITAL: SURVEY RESULTS ................................................................................................... 16 CONCLUDING REMARKS .......................................................................................................................... 17

HUMAN CAPITAL...................................................................................................................................... 18 3.1 3.2 3.3 3.4 HUMAN CAPITAL AT NATIONAL LEVEL .................................................................................................... 18 HUMAN CAPITAL IN THE FOOD/DRINK SECTOR ......................................................................................... 20 HUMAN CAPITAL: SURVEY RESULTS ........................................................................................................ 20 CONCLUDING REMARKS .......................................................................................................................... 21

SOCIAL CAPITAL...................................................................................................................................... 22 4.1 4.2 4.3 4.4 SOCIAL CAPITAL AT NATIONAL LEVEL ..................................................................................................... 22 SOCIAL CAPITAL IN THE FOOD/DRINK SECTOR ......................................................................................... 24 SOCIAL CAPITAL: SURVEY RESULTS ......................................................................................................... 24 CONCLUDING REMARKS .......................................................................................................................... 26

ORGANISATIONAL CAPITAL AND ENTREPRENEURSHIP ........................................................... 27 5.1 5.2 5.3 5.4 ORGANISATIONAL CAPITAL AT NATIONAL LEVEL .................................................................................... 27 ORGANISATIONAL CAPITAL IN THE FOOD/DRINK SECTOR ........................................................................ 29 ORGANISATIONAL CAPITAL: SURVEY RESULTS ........................................................................................ 29 CONCLUDING REMARKS .......................................................................................................................... 30

6 CONCLUSIONS ON THE SOCIO-CULTURAL ENVIRONMENT FOR SECTORAL INNOVATION .................................................................................................................................................... 31 6.1 6.2 NATIONAL SOCIO-CULTURAL ENVIRONMENTS AND INNOVATION PERFORMANCE .................................... 31 POLICY IMPLICATIONS OF SOCIO-CULTURAL ENVIRONMENT ................................................................... 37

ANNEXES............................................................................................................................................................ 38

REFERENCES .................................................................................................................................................... 54

Work package 10 of the SYSTEMATIC project aimed at identifying socio-cultural barriers and driving forces to innovation across ten sectors: food/drink, automotive, energy production, biotechnologies, textiles and clothing, chemicals, information and communication technologies, aerospace, machinery and equipment, and eco-innovation. Our work extends the analysis carried out in the previous workpackages on the barriers to innovation and the driving forces, by identifying and analysing other sector specific characteristics such as for example consumer habits, tradition and culture, organisational rigidities, and mobility of the workforce. In the literature on innovation, socio-cultural factors are most often used to characterise a geographically defined community (e.g. a nation, a region, etc.) rather than a sector of economic activity. Nevertheless, management literature and simple observation suggests that behaviour is also shaped by factors inherent to belonging to a professional group (with shared educational, work experience, social networks such as engineering associations, etc. trajectories). Equally, the increasingly integrated European market with large companies operating across the Single Market imposing their management culture on operating divisions and their standards and practices on suppliers may also lead to cases where the culture of innovation in enterprises diverges from that of their home region or country. Equally from the demand side, we know from economic literature that not all products have the same inherent characteristics and that they are more or less sensitive to consumer demand. Sophisticated marketing can change perceptions of a product in wider society but equally interest groups and lobbies and changing social values can equally undermine a products position or image in the eyes of consumers / buyers. These societal forces, the subtle, or sometimes dramatic, changes in the balance of market power can heavily influence the position of certain sectors more than others (most simply one could imagine that sectors producing essentially final consumer goods, food or automotives for instance, would be more sensitive to such factors than sectors producing intermediary goods such as machinery and equipment). In this respect the analysis of socio-cultural factors goes to the very heart of what the SYSTEMATIC project set out to examine: are there sectoral innovation systems operating at national level or even across national boundaries; and if so does this require a distinct policy approach on the part of national or European institutions. If the hypothesis is correct that there are socio-cultural factors which influence innovation in specific sectors to a greater or lesser extent and that these factors transcend national boundaries, then the SYSTEMATIC project will have come closer to elucidating the policy issues related to sectoral innovation systems. In consequence, the approach of the study team was twofold: first, we have analysed similarities and differences across national socio-cultural profiles and then we have explored socio-cultural factors relevant for each of the specific sectors. The study was conducted in several steps: The first step provides a review of academic literature on socio-cultural factors influencing innovation. Based on this literature review a selection was made of generic socio-cultural factors relevant to innovation. This led us to develop a novel conceptual framework entitled the four capitals approach. 3

 Following a review of available surveys dealing with relevant socio-cultural aspects (e.g. Eurobarometer, European Social Survey, Community Innovation Survey), relevant indicators were collected with an objective to characterise national sociocultural environments. A framework of socio-cultural indicators at country level and a database of national data were developed. Presentation and analysis of the data was undertaken following the four capitals approach. To gather further sectoral insights, a survey was prepared and submitted to the experts of the Europe Innova panels and other key sectoral stakeholders. In parallel socio-cultural characteristics especially relevant for specific sectors were scanned in the literature and strengthened with the views of the experts of the Europe Innova panels1. All these inputs were consolidated in ten sectoral reports around the four capitals of our approach. This report is dedicated to the socio-cultural determinants of innovation in the sector of food and drink. The food and beverages industry is generally regarded as a lowtech industry based on the OECD classification of industries by level of technology. In 2004, EU15 R&D intensity, expressed as R&D expenditure in the food and drink industry as a percentage of industry output, was, on average 0.24%2. However, the empirical results of several studies show that the growth of the food sector depends on its capacity to innovate. Product differentiation as well as packaging associated to marketing are some of the key components of competitiveness of this sector. This sector is a relatively fragmented one, with, on the one hand, a few very large, multinational firms competing on the global market with global brands and a large product range (see annex 9), and, on the other hand, smaller enterprises often serving local markets concentrating on regional preferences for local specialities. France, Germany, Italy, Spain and the UK are the leading producers of food and drinks in the EU, accounting for about 70% of total EU turnover3.

No panel of expert took place for the following sectors: food and drink, chemicals and machinery and equipment. For further information, see http://www.ciaa.be 3 See annex 1 for a more complete overview
2

1
1.1

Introduction
The four capital approach of the study

Socio-cultural barriers or drivers to innovation are socio-cultural factors that influence sectoral innovativeness. In this study, it is assumed that innovation processes are influenced by a range of socio-cultural factors. Various dimensions can be used to describe the socio-cultural characteristics of a community (whether it be geographically or professionally defined). Each of these dimensions of the socio-cultural value system can be described by (a set of) sociocultural factors. In this project four dimensions4 are used to identify the socio-cultural characteristics of communities relevant to innovation: cultural capital & consumer behaviour, human capital, social capital, and organisational capital & entrepreneurship.

Within each of these dimensions specific elements can be distinguished that are considered relevant to innovation. Cultural capital was defined by Pierre Bourdieu (1981) as the inherited and acquired properties of ones self. Inherited not in the genetic sense, but more in the sense of time, cultural, and traditions bestowed elements of the embodied state to another usually by the family through socialisation. It is not transmittable instantaneously like a gift. It is strongly linked to one's habitus a person's character and way of thinking. The definition refers to the cultural background and basic value system that is shared by the individuals in a community and manifests in their attitudes and habits, including consumption. In this context, demand is composed of individual consumers and firms characterised by different attributes, knowledge and competencies, and is affected by social factors and institutions. The evolution of demand specific to sectoral communities is likely to influence sharply the dynamics of sectoral systems (Malerba 2005). The cultural capital and consumer behaviour category encompasses factors representing certain basic values, and resulting attitudes, held by societies which may influence innovation activity: the interest in and the attitude towards science and technology, the attitude towards risk from new technologies, the attitude towards the future, the attitude of people towards the environment, the attitudes towards other cultures5, the consumers responsiveness to new technologies. Human capital, a more familiar concept, is defined by the OECD (2005) as the knowledge, skills and attributes derived from education, training and work experience. The literature on knowledge economics (Cowan, David, Foray, 2000) emphasises the point that knowledge plays a central role in innovation and production; while the evolutionary literature (Nelson, 1995) underlines that sectors
4

Three of these dimensions were used previously at European level (Ricardis project, 2006) but in a different context to define the intellectual capital of a company. To emphasise the importance of individual habits and attitudes, cultural capital and consumer behaviour were added to the analysis. 5 See also for instance the work of Florida R. (2003), who argues that the declared share of homosexuals in the population of a region can be used as a good proxy for the openness of society.

and technologies differ greatly in terms of the knowledge base and learning processes related to innovation. Several factors linked to human capital may influence innovation in companies, namely: the availability of human resources in science and technology (HRST) (national and international resources) and in knowledge-intensive services; the provision of higher educated people in the country; the job-to-job mobility of HRST. It is widely acknowledged that firms accumulate knowledge not only by managing knowledge flows from formal institutions through research, educating and training but also through fostering learning by interacting with other companies and consumers (Schienstock, Hamalainen, 2001). One of the key concepts used to analyse these relations is social capital. In "The Forms of Capital" (1986) Pierre Bourdieu defines social capital as "the aggregate of the actual or potential resources which are linked to possession of a durable network of more or less institutionalized relationships of mutual acquaintance and recognition." The OECD (2001) defines social capital as networks together with shared norms, values and understanding that facilitate cooperation within or among groups. Social capital is therefore about the nature and intensity of relationships. The essential assumption is that social networks have value, which means that social contacts affect the productivity of individuals and groups. The impact of social capital on innovation can be measured though different aspects: the cooperative behaviour of firms; the main sources of information for innovation; the extent of collaboration with competitors and academia, the level of trust in other people, the importance of informal networks. Our explicit hypothesis is that social capital (propensity to network) differs from sector to sector and hence is a more or less important barrier or driver to innovation. This assumption is comforted by a relatively large literature on co-operation and networking of enterprises. Finally, organisational capital may have an important impact on the innovation capacity of a company. Organisations resources are not just the obvious ones like cash flow or R&D personnel, but also the companys culture, routines, structure, ethics and management styles. Organisational learning "amplifies the knowledge created by individuals and crystallises it as part of the knowledge network of the organisation" (Nonaka and Takeuchi 1995). Several aspects may reflect the organisational capital as well as the entrepreneurship dimensions: the attitude towards work of individuals; the relation between employers and employees; the attitude towards risk; the extent to which companies implement organisational innovations, the level of organisational rigidities.

1.2

Methodology adopted

Constructing indices Available surveys and studies dealing with relevant socio-cultural aspects were screened in order to collect indicators characterising national profiles with respect to the four capitals approach adopted. This resulted in a framework with socio-cultural indicators at country level and a corresponding database of national data. Each capital is represented by several factors illustrated by a limited number of indicators. A choice was made to retain a limited number of specific indicators for each capital, which best reflect the socio-cultural environment of a country. The choice was made based on availability of data and also to avoid indicators which were closely correlated. Annex 1 provides the full list of selected indicators and their sources. In order to be able to draw comparisons between national socio-cultural frameworks, values adopted by each indicator in each country were indexed, with the average for the EU25 countries as the basis reference (=100). Each country (c) is therefore positioned in comparison to the EU mean.

Ic / EU 25 = 100 * (

Vc ) VEU 25

In case values were missing for some countries, the method of regression imputation was used to compute estimates. Missing values are substituted by the predicted values obtained from a regression. The dependent variable of the regression is the sub-indicator hosting the missing value and the regressor is the sub-indicator showing the strongest correlation with the dependent variable. In case of indicators where high values indicated a badly performing country, initial values were reversed. Therefore the higher the index, the better the performance of the country in comparison to the European mean. A synthetic index has then been compiled for each factor and each capital. For the determination of the human capital index for each country (H), we have:

H = { ;h ;h ;...;h ;...;h h
1 2 3 i

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We therefore have a range of k elementary indexes that we summarise numerically with a synthetic index Ic / EU 25 (H) which is calculated as an arithmetic average of the elementary indexes. The computation of elementary indexes before the one of the mean of indexes allows us to suppress the influence of the unit of measurement of each indicator. Each indicator was attributed the same weight in the calculation of the synthetic index.
Ic / EU 25 (H) = 100 * 1 hci i n i=1 hEU 25
n

This procedure was applied to the national data for each capital. As a result each EU25 country has been positioned against the other countries with respect to its
h1 c
h1 , first component of H, in the country c.

should be read as : the value of the simple indicator

human, social, cultural and organisational capital (see annex 2 to 5 for the full list of indexes). A synthetic index called socio-cultural environment index has then been compiled using the same procedure and giving the same weight to each capital7. Cluster analysis A cluster analysis was performed to group information on countries based on their similarity on different sub-indicators. This analysis allows notably disseminating information on the composite indicator without losing that on the dimensions of the sub-indicators. In order to perform the analysis and to avoid results being influenced too much by scores of countries over-performing, the dataset was normalised for outliers scores with the next best values8. The method of k-means clustering was used for cluster analysis9. This method is useful when the aim is to divide the sample in k clusters of greatest possible distinction. The parameter k was decided in advance. The k-means algorithm supplies k clusters, as distinct as possible, by analysing the variance of each cluster. The aim of the algorithm is to minimise the variance of elements within the clusters, while maximising the variance of the elements outside the clusters. While acknowledging the limits (data availability, subjective choice of indicators, etc), the results of the analysis provide an interesting and novel overview of the differences across the EU member states in terms of the socio-cultural environment, which may in turn influence the sectoral innovativeness of companies. Survey results As data allowing a similar analysis for sectors at European level was not available, a survey was conducted between October and December 2007 in order to gather the opinions of European sectoral experts10 on the relevance of socio-cultural factors for innovation performance in their sector11. Socio-cultural factors were defined as the elements of the value systems, traditions and habits, norms and institutions that are relevant for sectoral innovation performance and manifest in the attitudes, behaviour and choices made by individuals, organisations and societies. Sectoral literature review An extensive sectoral literature review was conducted in order to collect some more information on the sector specific socio-cultural determinants of innovation.

It could be presumed that income level is an important economic factor that might influence innovativeness in a country. The approach of the study has nonetheless been to look at socio-cultural factors shaping innovation and not at the very diverse factors shaping consumer and entrepreneurs mindsets in general. When looking closer at the relationship between cultural capital and GDP per capita the relationship is indeed not straightforward (low coefficient of determination, as for social capital). Other factors shaping individual mindsets and eventually reflecting in their choices that we decided not to include specifically in our analysis could be religious views, the size of the country, the level of public information, etc. These aspects have nevertheless been addressed in the survey conducted in the framework of this study. 8 Values representing the mean (100) plus two standards deviations were normalised with the next best value considering that 68% of the values drawn from a normal distribution are within one standard deviation > 0 away from the mean ; about 95% are within two standard deviations and about 99,7% lie within tree standard deviations 9 The analysis conducted with the hierarchical clustering method provides similar results as the k-means analysis. 10 Survey respondents were the experts of the Europe Innova Panels and additional experts from the Europe Innova network 11 A sectoral analysis of the survey results was conducted for the following sectors: automotive, biotechnologies, information and communication technologies, food/drink, aerospace, textiles and the cross-sectoral issue of eco-innovation. Nonetheless overall results across sectors include also few replies from the sector of energy production and chemicals.

1.3

Socio-cultural environment and innovation: establishing a relationship?

According to the results of the survey on socio-cultural determinants of innovation conducted amongst European key European sectoral stakeholders between October and December 2007, socio-cultural factors are important determinants of sectoral innovativeness (for 87% of respondents across sectors, 100% for the food/drink sector). Almost three quarters of respondents across sectors believe that their sector has its own distinct culture, determining sectoral innovation processes in a different way than in other sectors. This percentage goes up to 87% for food/drink experts. Exhibit 1: Do you believe that your sector has its own distinct culture, which determines sectoral innovation processes in a different way than in other sectors (n=76 across sectors out of which 8 for food/drink)?

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Experts were asked to rank the different socio-cultural factors in their order of importance for innovation performance in their respective sectors. It appears that the capital having the strongest influence on innovation in the food/drink sector is the organisational capital/ entrepreneurship followed by cultural capital and human capital, which are equally ranked. Social capital appears as the least important area influencing innovation performance in the sector. When looking at average rankings across sectors, human capital appears clearly on first position.

Exhibit 2: Area of socio-cultural factors which has the strongest influence on the innovation performance of each sector (Rank from 1 to 4 where 1 is the most important and 4 the least important area (n=69 out of which 8 for food/drink)
 

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Cultural capital and consumer behaviour

The concept cultural capital and consumer behaviour refers to the cultural background and basic value system that is shared by the individuals in a community and manifests in their attitudes and habits, including consumption. Demand is composed of individual consumers and firms characterised by different attributes, knowledge and competencies, and is affected by social factors and institutions.

2.1

Cultural capital at national level

Results from the analysis of national data indicate that the cultural capital in the Netherlands is by far the most favourable for innovation across the EU25 Member States, whereas it appears as a barrier to innovation in comparison for other European countries especially in Greece and Italy. The result for the Netherlands is strongly influenced by its score for the attitude of citizen towards the natural environment, their strong interest in science and technology as well as their positive attitude towards risky technologies. Across the new Member States, Hungary, Malta and Cyprus are the only countries with higher than average results. Exhibit 3: Indicators selected for cultural capital
Capital Indicator Interest in science and technology Attitude towards science Attitude towards risk from new technologies Cultural capital and consumer behaviour Attitudes towards future Attitudes towards environment Attitudes towards other cultures Sources Eurobarometer 224, QA1, interest in new inventions and technologies: very interested Eurobarometer 224, QA15b.6, The benefits of science are greater than any harmful effects it may have: agree Eurobarometer 224, QA12a.1, If a new technology poses a risk that is not fully understood, the development of this technology should be stopped even if it offers clear benefits: disagree Eurobarometer 225, Q7.2, The next generation will enjoy a better quality of life than we do now: agree Eurobarometer 217, Q11, Categorisation of the attitudes of European citizens towards the environment: convinced Resistance to multicultural society 2003 (index constructed by EUMC based on Eurobarometer 59.2): "It is a good thing for any society to be made up of people from different races, religions or cultures" and "(country)s diversity in terms of race, religion or culture adds to its strengths"; reversed values Eurostat, CIS3, Enterprises reporting the following factor as highly important in hampering innovation activities, as percentage of all innovative companies: customer responsiveness, reversed values

Customer responsiveness

11

Exhibit 4: Cultural capital across EU25 countries (basis 100: EU25 average)
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Cluster analysis The cluster analysis performed on cultural capital indicators provides an interesting overview of the differences between countries. The analysis classified EU25 countries into four groups, which we have labelled as follows: Conscious conservatives: these are countries in which citizens show a strong interest towards science and technology but are not especially open towards novelty, other cultures and who are especially reluctant about the development of new risky technologies. Moreover in these countries citizen seem to be less environmentally committed. Passive believers: in these countries citizen show a low interest towards science and technology issues but are positive and optimistic about the future and the benefits of science. Middle road: these are countries showing average values for all indicators. Active pessimists: in these countries, citizens are highly open towards novelty, and are ready to take risk. Interest in science and technology is high as well as the environmental commitment. Nonetheless, in these countries, citizens seem to be more pessimistic about the future and about the benefits of science and technology. Active pessimists cluster groups the countries which all perform above average in the cultural capital index. These are mostly high income countries which perform well also in other capitals.

12

Exhibit 5: Typology of EU25 countries for cultural capital

Conscious Conservatives Cyprus Greece Malta France Passive Believers Czech Republic Estonia Poland Hungary United Kingdom Middle Road Austria Spain Ireland Italy Portugal Slovenia Lithuania Latvia Slovakia Active Pessimists Denmark Luxemburg The Netherlands Belgium Germany Finland Sweden

2.2

Cultural capital in the food/drink sector

In the food & drink sector, innovation and the success of innovation depends to a large extent on consumers behaviour. According to Traill (1997), changes in food consumption patterns and food-related behaviour very often determine the nature of innovation taking place in these industries. Nonetheless, food companies do not just respond to public taste; they also help shape it through marketing and product formulation. By implication, they are a major force in shaping the food culture (Lang, Rayner, Kaelin, 2006). Food is a subject dear to most peoples hearts. Eating, shopping for food and cooking are fundamental activities of social and cultural lives. The socio-cultural factors that influence consumer demand for food and drink products are complex and include many questions such as: demographic and socio-economic change; lifestyles; health, nutrition and safety concerns; environmental and ethical concerns and migration and demand for ethnic foods. Socio-cultural pressures appear to differ between countries, suggesting that national settings are a determinant factor of innovativeness of the sector. Firstly, the consumers willingness to pay for a specific product is of high relevance for this sector. The role of economic factors is formulated in Engels Law, which states that when income rises, the proportion of expenditures allocated to food declines. According to Eurostat data, in 2005, households spent on average 12.4% of their expenditure on food and non-alcoholic beverages12. Over the past 10 years, this percentage has declined by 2 percentage points, even if consumption per capita varies substantially in the EU and across the world. These economic trends mean that the size of the market for food is diminishing relative to other sectors in the economy.13 There is, therefore, considerable incentive for farmers as well as food manufacturers to add value to their products to increase sales turnover, e.g. bread instead of flour, a ready prepared meal instead of the raw ingredients. According to the EFLIW (Future of the food and drink sector, 2004), all actors in the food system will tend to move up the food value chain in search of consumers with greater disposable income, to segment the market and offer a wider variety of choice through targeting new products at adults, teens, children, products aimed specifically for women, men, ethnic groups and so on.

12 13

See annex 9 and 10 for a more complete overview See annex 11 for a comparison of the old policy to the new one

13

Gracia and Albisu (1997, quoted by Avermaete, 2002) provide a summary of the impact of consumers behaviour on innovation in the food industry:
There are other factors related to consumers behaviour such as: income levels, socio-demographic characteristics, culture, attitudes and lifestyles, diet and health concerns which are also affecting common food patterns. Apart from these homogenisation processes, some food consumption differences exist and will exist because of cultural differences, established preferences, cultural backgrounds and other peculiarities. Everywhere consumers are demanding a larger number of food products with more attributes, including convenience, quality, diversity (frozen, ready to eat, natural, light products) and health. Besides, consumers face a wider range of food products, offered in different new ways as a result of the increasing competitiveness in the food retail sector.

Apart from demographic changes like the increased participation of women in the paid labour force, ageing population, increased cultural diversity within the society, non-economic aspects of food consumption are taking an increasing importance in the global food market (Traill, 1997). Consumers are increasingly concerned with food quality and safety, the environmental harm caused by the production, animal welfare as well as ethical and moral values, stemming from their culture and tradition. This pressure is not only put on the product but also on the process. In response to these changes that reflect notably the strengthened regulatory environment covering food safety, food quality and environmental standards, the food industry is forced to innovate. Concerning optimism and pessimism towards new technologies developed in the agricultural sector, 66% of the Europeans (EU25) share the opinion that high-tech agriculture will have a positive impact on their way of life in the next 20 years. Nevertheless, the French case is noteworthy, since only 36% of people hold this point of view. The application of science and technology to food and agriculture enables producing novel crops, crops with better yields or particular properties. Food scientists look for ways to alter the flavour of foods, extend shelf life or create new products with health benefits (EFLIW, Future of the food and drink sector, 2004). The production of novel foods also includes biotechnology and genetic modification. Demand for genetically modified crops and foods is highly shaped by public attitudes and regulation. Following the pressure exerced by several associations, negative public attitudes to GMOs in crops and food are now widespread, although the strength of antagonism varies from country to country (Senker, Van Zwanenberg et al., 2001). Opinion polling in 2002 showed that, while Europeans support medical applications of biotechnology, they are sceptical about EU agricultural and food-related biotechnology. Depending on the Member States, between 30% and 65% reject all reasons for buying GM foods. On average, 37% of European citizen will never accept the development of GMO to increase the variety of regionally grown food. Moreover, according to Eurobarometer (study 224), a majority of Europeans (54% of people in the EU27) share the idea that food made from genetically modified organisms is dangerous. This percentage is lower in the Nordic countries and in the UK, but significantly higher in Greece or in Cyprus. According to the Eurobarometer study (number 217), 40% of Europeans feel they lack of information on the use of genetically modified organisms (GMOs) in farming while 29% of Europeans cite

14

agricultural pollution amongst the main issues about which they feel they lack information. Nonetheless, as emphasised by Senker et al (2001), the Dutch experience shows that there is no direct correlation between the degree of public knowledge about and acceptance of biotechnology, implying that mere information campaigns are not sufficient to positively influence public acceptance. The Dutch public is more knowledgeable about biotechnology than those in other European countries, due to the long-standing work of non-government organisations. What turned out to be more important in influencing the attitude of the Dutch public towards biotechnologies was involving the public in biotechnology related policy decisions. Dutch citizens report a strong confidence in all actors of the biotechnology system and only 30% of the population consider GMO food as dangerous, which is the lowest rate across Europe. Moreover, international crises like BSE and foot and mouth disease increase public anxiety about the sector. The constantly changing regulatory environment has encouraged food retailers and food producers to establish voluntary standards (often set with zero tolerance) and labels relevant for their markets in an attempt to gain market share by meeting perceived public demands. This has led to the establishment of supply chains guaranteeing the absence of products including GMOs (Senker, Van Zwanenberg et al., 2001). Equally, increasing concern for animal welfare has forced the European meat industry to re-organise the production chain (Avermaete, 2002). Nevertheless, it can be noted that worry about animal welfare does not have an impact on views of GMO: 54% of Europeans will never approve the growing of meat from cell cultures so that farm animals do not need to be slaughtered (Eurobarometer 225). The Eurobarometer study (229) measured the ability to pay an additional premium for food produced in an animal welfare friendly production system. Even if the majority of Europeans (57%) appears to be ready to pay an additional premium for such products, strong differences appear between countries, with a higher readiness to pay in the Nordic countries and in the Netherlands and a lower one in Portugal, Lithuania, Hungary and Slovakia. Lately, literature shows that not all radical innovations are rejected by the food and beverage market provided that specific conditions are met, such as price, branding, information, and health benefits and sensory qualities of foodstuffs (Van Kleef et al, 2002, Verdurme, Gellynck & Viaene, 2003). Traditional diets are indeed giving way to new food choices, notably due to increased international integration, which leads to an increase in the demand for variety and year-round availability of fresh product (Schweikhardt and Whipple, 2001), although environmental concerns about for instance fruit and vegetables transported by airfreight can also reduce such demand. Some of these choices enhance the diet, while others are high in fats, sugar and salt, are more highly processed, and contain higher levels of protein sourced from animal products (Eurobarometer 186). In this respect, other researchers analyse the growing market for functional foods14 (Mark-Herbert 2003, Menrad, 2003, van Kleef et al, 2002, Wilkinson, 2002). Nonetheless this move towards functional food could make

14

So called functional foods have ingredients (or nutraceuticals) incorporated within them to give specific medical or physiological benefits, e.g. spreads that reduce cholesterol or pro-biotic yoghurt drinks

15

the food and beverage industry more dependent on the drug, chemicals and biotechnology industries (Wilkinson, 2002). In addition the shift towards organic food and regional brands was a great opportunity for SMEs in the sector, which have reduced the use of chemical inputs, increased the human capital intensity and acquired leadership in niche sectors (PORCH study, 2006). In addition to this phenomenon, greater time pressure on peoples lives is increasing the demand for convenience foods and ready meals, snacking and 'snatched' meals, and eating out. This trend towards more informal eating is boosting demand for packaged and processed foods, and ready meals (Euromonitor, 2002).15 The table in annex 13 from the World Innovation panorama (2005) distinguishes between five categories for innovation in Europe: pleasure, health, fitness, convenience and ethics. Amongst these categories, it appears that sophistication, diet and easy to handle issues are the most important ones even if the latter has losed of importance between 2004 and 2005. Exotism, medical properties, cosmetics, time-saving and ethical issues gained in importance between 2004 and 2005 while fun, naturality, vegetarism, nomadism, energy and well-being were declining. It should be emphasised that integration of information systems has a significant potential to affect the food sector, notably in the sense that it will allow food retailers gathering information about consumer preferences that can be used to determine the kinds of foods that the food manufacturers produce (EMCC, 2004a).

2.3

Cultural capital: survey results

Views of Europeans are divided on whether decisions concerning science and technology development should be based more on risks and benefits analysis rather than taking into account moral and ethical considerations16. In the framework of the survey experts were first requested to assess whether in their sectors decisions are taken considering risk and benefit analysis or rather moral and ethical considerations. Nearly two thirds of all respondents (63%) considered that while decisions in their sector are mainly taken considering risk and benefit analysis, moral and ethical considerations are also taken into account, in comparison to 50% for food/drink experts (37% ranked both aspects equally). None of the respondents was of the opinion that decisions are influenced by only moral and ethical considerations. Attitudes towards other cultures can be captured, in part, by opinions on the impact of immigration. The vast majority of respondents (77% in general, 62% for food/drink) agreed that openness towards other cultures creates a more favourable environment for innovation in their sectors. According to the third Community Innovation Survey, customer responsiveness is considered as a relevant factor hampering innovation activity. The vast majority of experts (59% in general, 62% for food/drink) agreed that customer responsiveness to innovative services or products may be explained by cultural factors in their respective sector. Experts were requested to rank 13 factors influencing consumer responsiveness to innovation in their sector in order of importance (see annex 6 for a table with results per sector).

15 16

See annex 12 for an overview of the most innovative sub-sectors worldwide Eurobarometer n255

16

Exhibit 6: Importance of the factors influencing consumer responsiveness to innovation in each sector
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Whereas income level is considered as the most important factor influencing consumer responsiveness to innovation across sectors, the picture is different for the sector of food and drink where product/ service originality is ranked first followed by the quality of marketing/advertising. Noticeably the scale of distribution and the place of residence appear more important in this sector than across the sectors under focus in this study. On the other hand, income level is less important than in other sectors as well as the availability of information and the attitude towards science. Even if ranked in last position, the ethnic origin of consumer is more important in influencing consumer responsiveness to innovation in the sector of food and beverages than across sectors.

2.4

Concluding remarks

Countries especially active in the sector of food and beverages (France, Germany, United Kingdom, Spain, Italy) are present in each of the clusters for cultural capital and perform differently. Policies targeting cultural capital would therefore be more efficient at national level than at European or sectoral level. In this sector with strong competition, originality of the product and marketing campaigns are the most important factors influencing the consumers readiness to pay for new products. Since non-economic aspects are increasingly decisive for consumers choice (e.g. for ethical, organic, functional, convenience food), producers have to move-up the value chain and rely increasingly on voluntary standards and labels to differentiate their products.

17

Human capital

Human capital refers to the knowledge, skills and attributes derived from education, training and work experience. The literature on the knowledge economy emphasises that knowledge plays a central role in innovation and production. According to the results of third Community Innovation Survey17 the lack of qualified personnel was indeed one of the most important factors hampering innovation activities. Evolutionary literature underlines nonetheless that sectors and technologies differ greatly in terms of the knowledge base and learning processes related to innovation.

3.1

Human capital at national level

With respect to human capital, the best environment is found Luxembourg, which has a particularly high share of foreign-born human resources in science and technology (46,2%). This result should be interpreted with caution since this small country is performing relatively poorly in terms of people active in knowledge-intensive services. The good relative results of Denmark and Spain are partly due to a high share of the population involved in life-long learning; whereas the performance of Poland, Slovenia and Slovakia is weak in terms of the diversity of nationalities in HRST. Portugal performs well below the EU25 average for all indicators of human capital. Exhibit 7: Indicators selected for human capital
Capital Indicator Human resources in science and technology Nationality of HRST Higher education (provision of higher educated people) Human capital Human resources in knowledge-intensive services Job-to-job mobility of employed HRST Participation in lifelong learning Availability of qualified personnel Sources Eurostat, HRST statistics 2005, Human resources in science and technology as a share of labour force, Total Eurostat HRST database, Share of non-national human resources in science and technology (HRST), aged 25-64 years Eurostat Labour Force Survey Percentage of people with tertiary education qualifications (ISCED 5 and 6) in the population aged 25-64, 2006 Eurostat HRST database, Share of total employment in knowledge-intensive service sectors, 2005 Eurostat HRST database, 2006 / job-to-job mobility of employed HRST in % Eurostat, Labour Force Survey, Population participating in life-long learning aged 25-74, 2006 Eurostat, CIS3, Enterprises reporting the following factor as highly important in hampering innovation activities, as percentage of all innovative companies: lack of qualified personnel, reversed values

17

Eurostat, Community innovation survey, Third Wave, 2000-2001

18

Exhibit 8: Human capital across EU25 countries (basis 100: EU25 average)
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Cluster analysis The cluster analysis on EU25 countries led to the following four groups: Rigid labour market: in these countries, the provision of higher educated is low as well as the share of human resources in science and technology. The workforce is particularly immobile and less involved in life-long learning. In this country, the share of non-national human resources in science and technology is also particularly low. Middle road: this group of countries share an average performance for all indicators of human capital in comparison to the EU25. Open labour market: these countries show a particularly high share of nonnationals in their human resources in science and technology. These are typically small EU countries, clearly dependent on temporary or permanent immigration of skilled labour if they are to compete globally. Strong human capital: These countries perform well in terms of availability of human resources in science and technology, the provision of highly educated people and score particularly well on the mobility of the workforce and the share of individuals involved in life-long learning. Exhibit 9: Typology of EU25 countries for human capital
Rigid labour market Czech Republic Germany France Hungary Italy Malta Poland Portugal Slovenia Slovakia Middle road Austria Belgium Greece Finland Lithuania Latvia The Netherlands Open labour market Cyprus Estonia Ireland Luxembourg Strong human capital Denmark Spain Sweden United Kingdom

19

3.2

Human capital in the food/drink sector

Among food & drink companies that carry out product and process innovation (85% of all firms), at least 40% do not have a department dedicated formally to R&D. Instead the decisive factor is the percentage of qualified personnel (Lang, Rayner, Kaelin, 2006). The share of employees with higher education within the sector is far below the manufacturing average, but the share of firms that use training is higher. Despite the low share of employees with higher education, firms consider continuous improvement of the workforce skills as important . Studies of Irish and Polish regions carried out in the framework of the Innovaloc project (Mahon, Pitts, 2003 and Wigier and Szczepaniak, 2003) show that staff training and the percentage of turnover spent on staff training (especially concerning work safety, technical issues and computing technologies) are indeed significantly correlated to innovation. Furthermore, despite the average percentage of qualified technical staff to total workforce being as low as 5.4%, the variable proved to be significantly related to innovation. Romijn and Albaladejo (2002), on the contrary, found no relationship between the proportion of technicians in the firms workforce and the propensity to innovate. According to Eurostat data, compared with the total manufacturing sector, the food, beverages and tobacco sector presents unusual characteristics concerning employment. These are the higher presence of women and the greater recourse to part-time work. In 2002, 38.5% of personnel working in the EU15 food beverages and tobacco sector were women, 10% points above the share for total manufacturing (28.3%). The largest differences at national level were found in Luxembourg, Finland and Germany. In 2002, 11.7% of employees of the sector were in part-time work, which is 4.1 percent points higher than the manufacturing average (7.6%). In the case of countries like Germany and Finland, the proportion of part-time workers is even twice as high as the rate presented for manufacturing as a whole.

3.3

Human capital: survey results

In the framework of the Innovation Watch survey, respondents were requested to rank the reasons explaining the lack of qualified personnel in innovation activities in their sector in their order of importance.

20

Exhibit 10: Most important reasons explaining the lack of qualified personnel involved in innovation activity in each sector
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The results indicate that across sectors the most important reason explaining the lack of qualified personnel is the limited supply of highly specialised labour followed by the lack of people with interdisciplinary skills. For the food and beverages sector, the results are slightly different with the lack of appropriate professional training being the second most important reason (average value of 3.7 in comparison to 3 across sectors). The low job-to-job mobility is also particularly more important in the sector than across all the sectors under focus in this study. One other noticeable result is the low ranking attributed to the low number of students and graduates in the relevant disciplines in comparison to the results across sectors. On the three last positions come difficult working conditions, the unattractive image of the sector and the inappropriate gender balance, which are higher weighted than across sectors.

3.4

Concluding remarks

Countries in which the sector of food and beverages is particularly strong are performing differently in terms of human capital in comparison to the European average. This is not surprising since labour and education policies are typically of national competences. Nonetheless most of them belong to the same cluster, namely rigid labour market. The food/drink sector has a specific profile in comparison to other manufacturing sectors with a lower than average share of higher educated personnel and a better than average implementation of training. According to the results of the survey it would be especially lacking in highly specialised labour. Continuous improvement of the workforce skills is particularly important in the sector.

21

Social capital

Social capital in the context of this study is the capacity to network and collaborate between individuals and companies facilitating the generation and accumulation of knowledge and innovation activity. Generation and accumulation of social capital is based on trust and made possible as actors share common norms, values and understanding.

4.1

Social capital at national level

With respect to social capital, the most favourable environment seems to be in Finland, where companies are highly open to collaboration, be it with competitors or academics. Customers are an important source of information, the corruption level is low and the level of trust between people is fairly high. The Baltic countries are performing relatively well for the indicators related to the cooperation of companies with competitors. The situation of Italy with a very low openness to the external world and a high level of corruption is noteworthy. Exhibit 11: Indicators selected for social capital
Capital Indicator Cooperation with competitors Sources Eurostat, CIS4, 81/2007, Different types of cooperation partners of enterprises by country, as a percentage of innovative enterprises: Competitors or other enterprises of the same sector

Social capital

Cooperation with Eurostat, CIS4, 81/2007, Different types of cooperation partners of enterprises by country, as a percentage of innovative enterprises: Universities or other higher the academic education institutions world Customer as a source of information Trust Corruption Eurostat, CIS4, 81/2007, Highly important sources of information for innovation by country, as a percentage of innovative enterprises: clients or customers Eurobarometer 225, QB8, In general, would you say that you trust other people almost always, often, only sometimes, rarely, or almost never?Total answer Trust Transparency international, CPI 2006, Corruption Perceptions Index EU-27 (from 10=clean to 0=highly corrupt)

22

Exhibit 12: Social capital across EU25 countries (basis 100: EU25 average)
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Cluster analysis A cluster analysis was again performed on indicators of social capital and EU25 countries can be classified into four groups: Closed networks: countries in this group share in general a low level of trust and a high level of corruption. Cooperation with academia is as well particularly low. Weak business links: in these countries, cooperation of companies with other actors along the value chain is especially low, especially with competitors. Strong business links: countries in this group share a high level of cooperation with competitors, and tend to consider the customer as an important source of information for innovation. High performance networks: in these countries, cooperation of companies with academics is highly developed, customers are considered as a particularly important source of information for innovation and cooperation with competitors is also fairly high. Trust between actors is particularly high and corruption is not an issue. Exhibit 13: Typology of EU25 countries for social capital
Closed networks Cyprus Greece Poland Weak business links Strong business links Austria Czech Republic Germany Estonia Malta France Spain Lithuania Portugal Luxemburg Ireland Latvia Italy Slovenia Slovakia United Kingdom Belgium Hungary High performance networks Denmark Finland The Netherlands Sweden

23

4.2

Social capital in the food/drink sector

As was noted by Avermaete (2002), small food firms in Europe rely heavily on cooperation with research organisations to carry out R&D. They need external sources of knowledge to complement the internal knowledge, mainly for quality and safety control but also for the development of new products and optimisation of existing processes. Nevertheless, the results of the study done by Avermaete et al. in 2003 show that co-operation with other sites within the group, customers and research institutes tend to be positively associated with more radical innovations and that geographic proximity to research institutes is particularly important in this regard. The results of studies carried out on Irish and Polish regions (Mahon, Pitts, 2003 and Wigier and Szczepaniak, 2003) show empirically that there is a strong correlation between external cooperation (suppliers of equipment, customers, similar enterprises and contract R&D/research institutions/universities) and innovation in the food sector. According to the Know survey (2006), firms in the food and beverages sector regularly seek to obtain ideas for innovation by attending trade fairs and conferences and by reading scientific or business journals. The most important contributors to the original idea for their most important innovation were the customers, followed by the suppliers and the competitors. Competitors appear to be more important partners in the other sectors under review (namely chemicals, telecom equipment and ICT) in all analysed countries, whereas in Greece, Italy and the UK, the food sector is the one relying the most on suppliers as the primary source of innovation. External sources provide mainly technical and scientific knowledge as well as knowledge related to market introduction. External knowledge is mainly acquired through informal personal contacts, often following previous experience and to a lesser extent through research collaborations. The study of Avermaete (2002) also shows that small food firms tend not to introduce innovations that would have major organisational consequences without first consulting their largest customers. Small food firms producing for local markets tended to have regular face-to-face contacts with their local customers and, as a result, were well aware of new market opportunities which was a potential source of a competitive advantage. The great investment that firms of the sector have to make in advertising and marketing and the huge cost that represents the launch of a new product in a successful way, act as impediment to smaller firms from undertaking product innovation. Firms in the industry require a minimum size if they want to aim at launching new products successfully (Galizzi and Venturini in Von Tunzelmann and Rama).

4.3

Social capital: survey results

In line with what might be expected, the vast majority of survey respondents (91.5% across sectors, 87% for the food/drink sector) agreed that trust is an important factor determining collaborative innovation activity in their respective sectors of expertise. Comparing the level of trust between key sectoral stakeholders, the level of trust between companies is considered as low by 50% of food/drink experts (25% across sectors) and medium by 37% (38% across sectors). Trust between companies and research organisations was also ranked at a low level by 50% of food/drink experts 24

(17% across sectors) and at medium levels by 37% (50% across sectors). The level of trust between companies and government is significantly lower ranked for the sector of food and beverages than across sectors (75% for low, very low or no trust for food/drink experts, 48% across sectors). Only for the level of trust between research organisations is the result positive with 50% considering it as high. Sectoral experts were requested to rank a set of factors driving innovation collaboration in order of their importance. As in the sector of food and beverages, previous collaborations and/or shared experience was considered as the most important factor across sectors followed by the existence of funding opportunities for collaborative projects. Interestingly, the sharing of the same language/nationality comes on third position and is much more important than in across the sectors under focus in this study (9th position across sectors). Belonging to the same sector and labour mobility are both regarded as a much more important drivers of innovation collaboration in the food/drink sector than across sectors. The participation to conferences and seminars is noticeably ranked lower by food/drink experts. The least important factors appear to be being member of formal associations as across all sectors. Annex 8 provides a rapid overview of differences per sector. Exhibit 14: Main drivers of innovation collaboration

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25

4.4

Concluding remarks

Countries in which the sector of food and beverages is particularly strong are performing differently in terms of social capital in comparison to the European average. Nonetheless most of them belong to the same cluster, namely weak business links. Results of the survey reveal indeed a low level of trust between actors of the innovation system, except between research organisations even if, as in other sectors, trust is regarded as an important factor shaping collaboration activities in the sector. Collaboration in the sector with suppliers and research institutes is common and is often based on previous experience or on the existence of funding opportunities for collaborative projects. Nonetheless, it is often determined by the sharing of the same nationality/language and by belonging to the same sector.

26

Organisational capital and entrepreneurship

Organisational capital includes companys culture, routines, structure, ethics and management styles. It determines the organisations ability to deal with risks and uncertainty, to unlearn (lock-in phenomenon) as well as remain open for change.

5.1

Organisational capital at national level

With respect to organisational capital, the best innovation environment are found in Ireland and Denmark. Ireland demonstrates particularly strong entrepreneurial attitudes in comparison to other EU Member States. The number of SMEs introducing organisational innovation is particularly high in Ireland as well as in Denmark, Luxemburg and Germany, whereas the performance of Slovakia for this indicator is well below the EU average. Empowerment of employees by management is especially high in Sweden and low in the Mediterranean countries. The relationship between employers and employees appears to be particularly confrontational in France in contrast to Denmark. Exhibit 15: Indicators selected for organisational capital
Capital Indicator Initiative at work Sources European Value Study.- Here are some more aspects of a job that people say are important. Please look at them and tell me which ones you personally think are important in a job?Q.13H An opportunity to use initiative, mentioned, in% WEF, Readiness of the management to delegate decisions to subordinates is low (=1) (the management takes all decisions by itself) to 7=high (a lot of decisions are taken by domains and respective levels) WEF, Labor-employer relations in your country are 1=generally confrontational to 7= generally cooperative Eurobarometer Flash 160 Q12: one should not start a business if there is a risk it might fail: disagree CIS3, Number of SMEs who have either introduced new or significantly improved knowledge management systems, a major change to the organisation of work within their enterprise or new or significant changes in their relations with other firms or public institutions Eurostat, CIS3, Enterprises reporting the following factor as highly important for innovation activities, as percentage of all innovative companies: organisational rigidities, reversed values

Enpowerment Relation between Organisat employers and ional employees capital Risk and aversion/entrepren entrepren eurship eurship SMEs which introduced an organisational innovation Organisational rigidities

27

Exhibit 16: Organisational capital in EU25 countries (basis 100: EU25 average)
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Cluster analysis The cluster analysis performed on indicators of organisational capital provides an interesting overview of the differences between countries. Based on this analysis EU25 countries can be classified into four groups: Rigid organisations: this group gathers countries in which the level of empowerment of employees by employers is low. Individuals appear particularly adverse to risk even if they demonstrate a high importance given to initiative at work. Low personal engagement: these countries share a particularly low level of importance given to initiative at work by individuals. New ventures: in this group of countries individuals tend to be particularly open to start a business even if there is a risk of failure and the relationship between employers and employees is particularly confrontational. Flexible organisations: these countries share a high level of empowerment, have in general particularly collaborative relations between employers and employees as well as a high share of SMEs introducing organisational innovations. Exhibit 17: Typology of EU25 countries for organisational capital
Rigid organisations Low personal engagement Hungary Czech Republic Malta Estonia Slovenia Spain Lithuania Latvia Portugal Slovakia New ventures Belgium Cyprus Greece United Kingdom France The Netherlands Italy Flexible organisations Austria Germany Denmark Luxemburg Slovenia Finland Ireland Sweden

28

5.2

Organisational capital in the food/drink sector

The food sector is generally considered a traditional and low-tech industry. Nevertheless the Fraunhofer Institute (2006) underlines that organisational innovation can play an important role in this industry. Knowledge creation in small food firms is not based on R&D (see for example the results of the study of Giuletti et al., 2004), even if the decision-making process heavily relies on tacit knowledge. According to the Fraunhofer Institute (2006), R&D in the food sector is mainly concentrated in large firms and organisational changes directed to improve these activities are likely to be of little relevance to SMEs. SMEs make up 99.1% of the food and drink business population and account for about 50% of the turnover.18 These firms are often family-run enterprises, with knowledge transferred and translated from generation to generation. Therefore background and experience rather than theory make up the knowledge base. Indeed, according to a study carried out in English, Irish, French and Polish regions, the majority of managers in the food industry do not have higher degrees of education (Avermaete et al., 2002). However the results of this study shows that more than half of the entrepreneurs with a degree in engineering introduced a product innovation with a major impact on the firms turnover (over 10 percent). It has to be further emphasised that, according to this study, the number of years of activity of the entrepreneur in the firm and the years active as top-manager were negatively correlated with the impact of innovations. In this respect, entrepreneurs that had more recently entered the firm were more likely to introduce innovation with a high impact on the firms turnover. It could be argued that younger managers bring new ideas to the firm and therefore inspire a greater number of innovations. In contrast, past experience of working in a similar business showed a significantly positive correlation with radical innovation. The authors of this study explain this phenomenon by the fact that most entrepreneurs that worked in the food sector previously came from large enterprises that generally had more innovation projects and more experience with respect to safety controls. Entrepreneurs with such backgrounds would tend to be more capable of tackling the challenges of the tight regulation and would be at an advantage in estimating the risks, costs and profits of innovations as compared to other entrepreneurs.

5.3

Organisational capital: survey results

The aim of the last set of questions of the survey was to gather experts views on organisational rigidities, economic risk and corporate culture as factors influencing innovation in their sector. Views on how well companies in each sector adapt to challenges accompanying innovation activities in terms of organisation and management are widely spread. While 40% of respondents across sectors were of the opinion that companies adapt well (25% for food/drink), 28% disagreed with this statement (25% for food/drink) and 31% neither agreed nor disagreed (62% for food/drink). The same spread across sectors arises for the question on whether managers in each sector are open to taking risk and pursuing new risky projects. Moreover more than half of the experts (55%) evaluated that in their sectors
See http://www.ciaa.be: These 282,600 companies generate 47.8% of food and drink turnover and employ 61.3% of the sectoral workforce.
18

29

individuals are in general ready to establish a new business even if there is a risk of failure. This result is lower for the food/drink sector with only 50% of experts sharing this opinion while 37% neither agreed nor disagreed. Sectoral experts were finally asked whether they agree that corporate culture (e.g. internal code of conduct, corporate social responsibility, environmental statements, etc.) of the companies in their sector is a key factor influencing innovation performance. Amongst food/drink experts 87% agreed with this statement (79% across sectors).

5.4

Concluding remarks

Organisational capital is considered as the most important socio-cultural factor influencing innovation activity in the food/drink sector. Countries in which the sector of food and beverages is particularly strong (France, Italy, United Kingdom, Spain, Germany) are performing differently in terms of organisational capital in comparison to the European average; these countries mainly belong to the new ventures cluster. From the analysis it can be highlighted that corporate culture is an important shaping innovation performance in the food/drink sector. The sector is made of many small companies, often family-run, where background and experience creates the knowledge base rather than theory. Nonetheless, young managers with engineering skills or similar experience in other bigger companies could have a positive impact on the innovativeness of the sector.

30

6
6.1

Conclusions on the socio-cultural environment for sectoral innovation

National socio-cultural performance environments and innovation

The aggregated results for each country across all capitals allows for an overview of the general socio-cultural environment, which has an impact on the innovativeness of companies. The variances of indexes of cultural and organisational capitals appear smaller across EU countries than for social and human capitals. Exhibit 18: The four socio-cultural capitals across EU25 countries (basis 100: EU25 mean)
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Finland, Denmark, Luxemburg, Sweden and the Netherlands have the most favourable socio-cultural environments for innovative activities when compared to all EU25 Member States. At the other extreme, Italy, Portugal, Poland, Malta and Greece have the least favourable socio-cultural environments for innovation.

31

Exhibit 19: Typology of EU25 countries for socio-cultural environment

Rigid socio-cultural environment Czech Republic France Hungary Lithuania Latvia Portugal Slovakia Closed socio-cultural environment Austria Cyprus Germany Greece Spain Italy Malta Poland Strong socio-cultural environment Belgium Denmark Estonia Finland Ireland Luxembourg The Netherlands Sweden Slovenia United Kingdom

In order to examine if the differences visible in different socio-cultural capitals has an impact on innovation performance, the following charts19 provide an overview of the relationship between several performance indicators, namely labour productivity20, EPO patents21 and business expenditures in research and development22 and the four capitals of this study23. For the sake of this exercise, normalised values were used, in order for the results not to be influenced by the performance of outliers24. Socio-cultural environment and labour productivity Organisational capital has the strongest correlation with labour productivity (see chart below). Ireland is the highest performing country for organisational capital and the second, after Luxembourg, for labour productivity; whereas Lithuania performs worst for both aspects.

19 The red line in each graph represents the linear regression line, when the indicator of innovation performance is considered as the dependent variable and the capital under focus as the independent variable. The R square value (coefficient of determination) displayed on each graph represents the part of the variance of the dependent variable that can be explained by the linear regression. The closer R square from 1, the best suited is the linear relation for describing the dataset. It appears that relations between each capital and each output indicator seem to be positive. 20 GDP per person employed, US$ EKS, Total Economy Database, Conference Board, 2007 21 European Patent Office (EPO) patents per million population, Eurostat, 2003 22 Business expenditures in research and development, Eurostat, 2005 23 Since the social capital appears to have a very weak correlation with each of these indicators, charts for this capital are not displayed here. 24 For details on the normalisation method used, see methodological part

32

Exhibit 20: Labour productivity and organisational capital

When considering the socio-cultural environment as a whole, a slightly positive relation with the labour productivity is apparent. Exhibit 21: Socio-cultural environment and labour productivity

33

Socio-cultural environment and EPO patents When considering the relation between EPO patents and cultural and organisational capitals, the picture appears rather clear, with the Nordic countries (plus Luxembourg and Germany) performing well in terms of both capitals and having a high share of EPO patents per million population. Exhibit 22: Cultural capital and EPO patents

Exhibit 23: Organisational capital and EPO patents

34

At the aggregated level of the socio-cultural environment as a whole, the relationship with the number of EPO patents per country is even clearer. The weaker the sociocultural environment, the lower the number of EPO patents per million population. Exhibit 24: Socio-cultural environment and EPO patents

Socio-cultural environment and BERD Organisational capital shows the strongest relation with BERD. The Nordic countries are the best performer for both aspects. Ireland is an interesting case where the level of organisational capital is relatively high but the level of BERD low. Exhibit 25: BERD and organisational capital

Looking at the correlation between cultural capital and BERD, the picture that emerges is also interesting even if the relation is weaker than with organisational 35

capital: a group of countries perform particularly well in both aspects namely Sweden, Finland, Denmark, Luxembourg, Germany and the Netherlands. Exhibit 26: BERD and cultural capital

As a whole, socio-cultural environment and the level of BERD is positively correlated. Sweden and Denmark in particular show high levels of BERD associated to strong scores for socio-cultural environment; Germany and Austria on the other hand perform very well in terms of BERD while the index of socio-cultural environment is just below the European average. This could indicate that the sectoral composition of an economy can compensate for weaknesses in socio-cultural characteristics. Exhibit 27: BERD and the socio-cultural environment

36

6.2

Policy implications of the socio-cultural environment

Organisational capital is considered as the most important socio-cultural factor influencing innovation activity in the food/drink sector. Countries in which the sector of food and beverages is particularly strong (France, Italy, United Kingdom, Spain, Germany) are performing differently in terms of organisational capital in comparison to the European average. Nonetheless these countries mainly belong to the new ventures cluster. From the previous analysis it can be highlighted that the corporate culture is an important shaping innovation performance in the food/drink sector. The sector is made of many small companies, often family-run, where background and experience are making the knowledge base rather than theory. Nonetheless, young managers with engineering skills or similar experience in other bigger companies could have a positive impact on the innovativeness of the sector. In terms of cultural capital, countries with a strong food/drink are present in each of the clusters for cultural capital and are performing differently for this indicator. Policies targeting cultural capital would therefore be more efficient at national level than at European or sectoral level since national profiles are very different. Food and beverages being part of the commodities, consumer responsiveness to innovative products is less influenced by the income level than in other sectors. In this sector with strong competition, originality of the product and marketing campaigns would be the most important factors influencing the consumer's readiness to pay for new products. Since non-economic aspects are increasingly decisive for consumer's choice (e.g. for ethical, organic, functional, convenience food), producers have to move-up the value chain and rely increasingly on voluntary standards and labels to differentiate their products. With respect to human capital countries in which the sector is particularly strong are performing differently in comparison to the European average. This is not surprising since labour and education policies are typically of national competences. Nonetheless most of them belong to the same cluster of our analysis, namely rigid labour market. The food/drink sector has a specific profile in comparison to other manufacturing sectors with a lower than average share of higher educated personnel and a better than average implementation of training. According to the results of the survey it would be especially lacking of highly specialised labour. Continuous improvement of the workforce skills is particularly important in the sector. Regarding social capital, national profiles of good performers in the sector are differing. Nonetheless most of the strongest countries in the sector belong to the same cluster of our analysis, namely weak business links. Results of the survey reveal indeed a low level of trust between actors of the innovation system, except between research organisations even if, as in other sectors, trust is regarded as an important factor shaping collaboration activities in the sector. Collaboration in the sector with suppliers and research institutes is common and is often based on previous experience or on the existence of funding opportunities for collaborative projects. Nonetheless, it is often determined by sharing of the same nationality/language and by belonging to the same sector. 37

Annexes
Annex 1: Data sources for each indicator in each capital
Capital Indicator Interest in science and technology Attitude towards science Sources Eurobarometer 224, QA1, interest in new inventions and technologies: very interested Eurobarometer 224, QA15b.6, The benefits of science are greater than any harmful effects it may have: agree

Eurobarometer 224, QA12a.1, If a new technology poses a risk that is not Attitude towards risk fully understood, the development of this technology should be stopped even from new if it offers clear benefits: disagree technologies Cultural capital and consumer behaviour Attitudes towards future Attitudes towards environment Attitudes towards other cultures Eurobarometer 225, Q7.2, The next generation will enjoy a better quality of life than we do now: agree Eurobarometer 217, Q11, Categorisation of the attitudes of European citizens towards the environment: convinced Resistance to multicultural society 2003 (index constructed by EUMC based on Eurobarometer 59.2): "It is a good thing for any society to be made up of people from different races, religions or cultures" and "(COUNTRY)s diversity in terms of race, religion or culture adds to its strengths" ; reversed values Eurostat, CIS3, Enterprises reporting the following factor as highly important in hampering innovation activities, as percentage of all innovative companies: customer responsiveness, reversed values Eurostat, HRST statistics 2005, Human resources in science and technology as a share of labour force , Total Eurostat HRST database, Share of non-national human resources in science and technology (HRST), aged 25-64 years Eurostat Labour Force Survey Percentage of people with tertiary education qualifications (ISCED 5 and 6) in the population aged 25-64, 2006 Eurostat HRST database, Share of total employment in knowledge-intensive service sectors, 2005 Eurostat HRST database, 2006 / job-to-job mobility of employed HRST in % Eurostat, Labour Force Survey, Population participating in life-long learning aged 25-74, 2006 Eurostat, CIS3, Enterprises reporting the following factor as highly important in hampering innovation activities, as percentage of all innovative companies: lack of qualified personnel, reversed values Eurostat, CIS4, 81/2007, Different types of cooperation partners of enterprises by country, as a percentage of innovative enterprises: Competitors or other enterprises of the same sector

Customer responsiveness Human resources in science and technology Nationality of HRST Higher education (provision of higher educated people) Human capital Human resources in knowledge-intensive services Job-to-job mobility of employed HRST Participation in lifelong learning Availability of qualified personnel Social capital Cooperation with competitors

Eurostat, CIS4, 81/2007, Different types of cooperation partners of Cooperation with the enterprises by country, as a percentage of innovative enterprises: Universities academic world or other higher education institutions Customer as a source of information Eurostat, CIS4, 81/2007, Highly important sources of information for innovation by country, as a percentage of innovative enterprises: clients or customers

38

Trust Corruption

Initiative at work

Enpowerment Relation between employers and employees Risk aversion/entreprene urship SMEs which introduced an organisational innovation Organisational rigidities

Eurobarometer 225, QB8, In general, would you say that you trust other people almost always, often, only sometimes, rarely, or almost never?Total answer Trust Transparency international, CPI 2006, Corruption Perceptions Index EU-27 (from 10=clean to 0=highly corrupt) European Value Study.- Here are some more aspects of a job that people say are important. Please look at them and tell me which ones you personally think are important in a job?Q.13H An opportunity to use initiative, mentioned, in% WEF, Readiness of the management to delegate decisions to subordinates is low (=1) (the management takes all decisions by itself) to 7=high (a lot of decisions are taken by domains and respective levels) WEF, Labor-employer relations in your country are 1=generally confrontational to 7= generally cooperative Eurobarometer Flash 160 Q12: one should not start a business if there is a risk it might fail: disagree CIS3, Number of SMEs who have either introduced new or significantly improved knowledge management systems, a major change to the organisation of work within their enterprise or new or significant changes in their relations with other firms or public institutions Eurostat, CIS3, Enterprises reporting the following factor as highly important for innovation activities, as percentage of all innovative companies: organisational rigidities, reversed values

Organisat ional capital and entrepren eurship

39

Annex 2: Cultural capital and consumer behaviour, indexes (Basis 100 = European mean)
Cultural capital and consumer behaviour AT BE CY CZ DE DK EE EL ES FI FR HU IE IT LT LU LV MT NL PL PT SE SI SK UK Interest in science Optimism and towards technology science 77 93 112 173 77 118 109 90 131 86 96 128 109 86 51 45 131 83 147 134 67 58 125 83 77 106 103 107 85 89 101 112 93 111 97 97 122 97 111 122 95 81 103 76 126 116 99 78 91 95 Attitude towards risk Attitude Attitude from new towards towards environment technologies future 85 88 135 113 80 174 108 155 113 47 56 117 80 122 80 61 85 160 66 66 193 103 61 136 38 66 136 76 105 111 80 76 136 91 118 93 56 125 115 116 144 61 129 111 58 125 120 70 75 123 98 117 70 35 170 147 59 53 117 158 70 70 94 41 94 153 88 76 229 59 129 112 117 53 53 Attitude towards Customer Cultural other responsive capital ness index cultures 100 102 97 86 83 74 90 115 61 50 121 112 112 113 122 104 92 119 71 102 110 103 111 117 119 99 115 102 101 103 100 107 97 97 95 104 105 90 95 101 101 102 102 102 104 99 99 102 100 97 92 101 103 94 108 116 95 80 101 111 93 107 98 84 98 117 89 101 129 97 99 109 87 86 99

40

Annex 3: Human capital, indexes (Basis 100 = European mean)

Higher Human education Human Job-to-job resources (provision resources in mobility Participa Availabili in science Nationa of higher knowledgeof tion in ty of Human Human and educated intensive employed life-long qualified capital lity of capital technology HRST people) services HRST learning personnel index 102 130 74 112 104 135 94 107 AT 121 121 133 129 94 76 99 110 BE 100 218 127 24 117 74 93 107 CY 90 17 56 177 67 57 105 81 CZ 112 98 99 194 88 69 85 107 DE 153 127 63 145 119 190 317 112 DK 117 233 139 75 112 65 97 120 EE 95 76 52 125 44 156 119 92 EL 101 133 147 94 138 238 96 135 ES 93 126 23 109 104 109 77 104 FI 80 104 63 90 115 58 18 109 FR 82 14 74 128 62 37 103 71 HU 93 79 97 102 158 125 74 IE 104 85 52 54 140 81 60 99 IT 82 99 20 112 40 89 49 104 73 LT 114 709 100 20 83 82 103 173 LU 89 18 88 33 114 67 103 73 LV 81 67 50 78 83 57 106 75 MT 130 52 122 59 112 146 101 103 NL 77 5 75 100 84 47 106 71 PL 56 51 56 63 80 38 93 62 PT 123 81 127 121 135 198 97 SE 126 98 5 89 188 54 154 98 98 SI 80 6 61 170 57 42 107 75 SK 108 110 123 100 143 199 96 126 UK Nationality of HRST : For LV in 2004; for LT in 2003, IT value missing estimated based on the method of regression imputation Job to Job mobility : Values estimated for IE and SE based on the method of regression imputation

41

Annex 4: Social capital, indexes (Basis 100 = European mean)

Cooperation with competitors 30 72 98 117 33 113 141 86 23 261 107 104 46 37 193 113 191 43 94 65 52 82 155 161 85 Social Cooperation Customer as capital with the a source of Corruption index academic world information Trust 89 39 104 128 78 118 105 106 114 103 20 21 43 82 52 117 129 83 64 102 76 40 102 125 75 122 137 156 144 134 77 113 106 91 105 57 39 69 65 63 42 21 115 108 62 296 204 137 147 209 90 98 96 108 100 122 97 109 73 101 90 124 111 114 97 42 25 94 73 54 107 170 87 70 126 89 110 104 128 109 123 142 87 61 121 38 82 63 103 66 111 108 148 132 118 55 81 72 53 65 67 57 83 96 71 155 138 156 140 134 174 163 83 91 133 132 149 85 61 118 89 110 102 131 103

Social capital AT BE CY CZ DE DK EE EL ES FI FR HU IE IT LT LU LV MT NL PL PT SE SI SK UK

42

Annex 5: Organisational capital and entrepreneurship, indexes (Basis 100 = European mean)
Relation between Risk SMEs which Organisational employers aversion/ introduced an Organisa Organisati capital and Initiative Enpowe and onal capital entrepreneur organisational tional entrepreneurship at work rment employees ship innovation rigidities index 101 117 122 87 126 96 108 AT 102 113 78 109 100 102 101 BE 102 78 103 104 112 95 CY 99 62 86 97 87 92 104 88 CZ 99 117 105 89 140 98 108 DE 103 133 130 111 150 106 122 DK 72 100 105 60 103 101 90 EE 117 75 85 135 104 97 102 EL 73 86 93 121 72 100 91 ES 100 124 99 130 123 102 113 FI 89 102 68 135 94 103 99 FR 128 82 105 39 50 100 84 HU 123 115 113 167 130 97 124 IE 134 75 76 118 84 101 98 IT 66 89 95 63 62 96 78 LT 102 113 113 104 153 99 114 LU 29 86 103 82 94 101 83 LV 144 80 95 60 85 104 95 MT 129 126 117 130 69 102 112 NL 117 84 87 97 51 101 89 PL 74 82 95 82 107 95 89 PT 108 140 109 121 115 100 115 SE 163 89 89 60 133 101 106 SI 65 89 107 82 35 102 80 SK 95 117 111 128 114 99 UK 111 Initiative at work: Value estimated for CY based on the method of regression imputation SMEs which introduced organisational innovation : Value estimated for UK based on the method of regression imputation

43

Annex 6: Please assess the importance of the factors influencing consumer responsiveness to innovation in your sector (values from 1-least important to 5 -most important) - average assigned values - survey results
Eco-Innovation (10 respondents)
Average Factors Average Factors Average Factors Average Factors

Automotive (15 respondents)

Biotechnology (16 respondents)

Food/Drink (8 respondents)

ICT (9 respondents)

Space (6 respondents)

Textile (9 respondents)
Averag e

All sectors (76 respondents)

Factors Average

Factors

Average Factors

Average Factors

income level 4,00 4,00 3,88

4,00

availability of information income level 4,00 quality of marketing/adve rtising

3,81

product/service originality (differentiation ) product/servi ce originality (differentiati on) attitudes towards science 3,67 quality of marketing/adve rtising 3,88 3,75 product/service originality (differentiation )

Fashion

4,33

income level

3,74

Fashion 3,90

3,92

income level

3,75

environmenta l consideration s

income level

4,00

3,59

product/servi ce originality (differentiatio n) education level 3,70 education level 3,50 3,75 age of consumer

3,69

education level

3,69

availability of information

3,67

product/ser vice originality (differentiat ion) education level 3,50 quality of marketing/a dvertising

4,00

3,55

availability of information 3,60 3,50 scale of distribution availability of information

3,69

attitudes towards science quality of marketing/ad vertising 3,40 income level 3,38 attitudes towards science 3,20 3,38 place of residence (urban/rural) income level

3,50

availability of information

3,50

4,00

availabilit y of informati on product/se rvice originality (differenti ation) quality of marketing /advertisi ng 3,38 income level 3,33 age of consumer 4,00 education level

3,52

age of consumer

3,62

quality of marketing/ad vertising

3,44

3,48

quality of marketing/ad vertising

3,38

scale of distribution

3,25

education level

3,25

environment al consideration s 3,13 Fashion 3,25 quality of marketing/ad vertising

3,33

education level

3,67

Fashion

3,18

place of residence (urban/rural) 3,10 Fashion

3,31

product/servi ce originality (differentiati on) product/servi ce originality (differentiati on) ethical consideration s 3,00 environmental considerations

3,19

2,83

availability of information

3,67

environm ental considerat ions 3,13 attitudes towards science 3,13 scale of distribution 2,50 scale of distribution 3,33 age of consumer

3,18

environmenta l consideration s

3,23

ethical consideration s

3,06

3,18

44

education level Fashion 3,00 3,00 age of consumer 3,13 3,13 2,33

3,00

environmenta l consideration s place of residence (urban/rural) ethical consideration s scale of distribution 3,00 3,00 2,75 Fashion 2,33 availability of information scale of distribution place of residence (urban/rural ) environmen tal considerati ons 2,89 attitudes towards science ethical considerati ons 2,17 1,33 ethnic origin of consumer ethnic origin of consumer 2,89

2,94

attitudes towards science

3,16

attitudes towards science

2,85

age of consumer

2,88

scale of distributio n

3,00

scale of distribution age of consumer 2,80 2,88 2,38 2,33 ethical considerations environmental considerations age of consumer

2,85

Fashion

2,69

2,77

ethical consideration s ethnic origin of consumer 2,70 2,75 2,25 ethnic origin of consumer place of residence (urban/rural) 2,40 ethnic origin of consumer 2,50 2,13 ethical considerations

2,54

place of residence (urban/rural)

2,19

attitudes towards science

place of residence (urban/rural)

2,78

place of residence (urban/rur al) ethical considerat ions 2,56 ethnic origin of consumer

2,73

ethnic origin of consumer

2,15

ethnic origin of consumer

2,00

2,21

Other: yearly driven distances n.a.

5,00

Other: medical reimburseme nt Other: financial or practical benefit

n.a.

Other: the product meets customer needs better than competitive products 5,00

Other: early adopter attitude

5,00

Other: family

5,00

Other: innovation champions/th ought leadres Other: town or country design n.a.

n.a.

Other: sex

4,00

Other: early adopter community

n.a.

Other: fear of failure within business culture

n.a.

45

Annex 7: Most important reasons explaining the lack of qualified personnel involved in innovation activity in each sector (values from 1-least important to 5 -most important) - average assigned values - survey results
Eco-Innovation (10 respondents) Factors Aver age Aver age 3,75 education programmes not adapted to industry needs lack of people with interdisciplina ry skills 3,75 low number of technicians 3,00 limited supply of highly specialised experienced labour 3,75 low number of technicians 3,50 education programmes not adapted to industry needs 2,83 3,75 limited supply of highly specialised experienced labour 3,33 unattractive image of the sector Factors Ave rage Factors Aver age Factors Aver age 4,56 education programmes not adapted to industry needs 3,80 limited supply of highly specialised experienced labour lack of appropriate professional training 3,75 low job-to-job mobility of personnel involved in innovation process 3,50 lack of people with interdisciplinary skills 3,50 low number of technicians 3,13 low number of students and graduates in the relevant disciplines 3,13 inappropriate gender balance limited supply of highly specialised experienced labour 3,60 lack of people with interdisciplinary skills 3,50 Food/Drink (8 respondents) Factors ICT (9 respondents) Space (6 respondents) Textile (9 respondents) All sectors (76 respondents) Factors limited supply of highly specialised experienced labour 4,00 lack of people with interdisciplinary skills limited supply of highly specialised experienced labour lack of appropriate professional training 3,25 low number of students and graduates in the relevant disciplines 2,88 low job-to-job mobility of personnel involved in innovation process 2,67 low number of technicians 3,67 education programmes not adapted to industry needs Aver age 3,51

Automotive (15 respondents) Factors

Aver age

Biotechnology (16 respondents) Factors Aver age

lack of people with interdisciplinary skills

3,62

education programmes not adapted to industry needs

3,73

low number of students and graduates in the relevant disciplines

3,54

lack of people with interdisciplinary skills

3,73

low number of students and graduates in the relevant disciplines

3,47

low number technicians

of

3,54

inability to attract international talent

3,67

3,32

limited supply of highly specialised experienced labour low number of students and graduates in the relevant disciplines lack of appropriate professional training 3,30 3,50

3,31

limited supply of highly specialised experienced labour

3,20

3,44

low number of students and graduates in the relevant disciplines 2,33 inability to attract international talent 3,44 low number technicians of

3,32

low job-to-job mobility of personnel involved in innovation process low number of technicians 3,00 education programmes not adapted to industry needs

3,23

low number of students and graduates in the relevant disciplines

3,13

3,26

lack appropriate professional training

of

3,00

low job-to-job mobility of personnel involved in innovation process

3,13

2,33

lack of people with interdisciplinar y skills

3,33

low job-to-job mobility of personnel involved in innovation process

3,04

46

education programmes not adapted to industry needs inability to attract international talent 3,00 3,00 2,75 2,33 3,11 education programmes not adapted to industry needs low job-to-job mobility of personnel involved in innovation process 3,00 lack of appropriate professional training difficult working conditions 1,00 inappropriate gender balance Other: noncompetitive income level, emigration 2,89 lack of people with interdisciplina ry skills inappropriate gender balance 2,00 inability to attract international talent low job-tojob mobility of personnel involved in innovation process 2,75 lack of appropriate professional training 2,63 difficult working conditions 1,83 unattractive image of the sector 2,25 inability to attract international talent unattractive image of the sector difficult working conditions 2,13 1,67 inability to attract international talent unattractive image of the sector 2,88 low job-to-job mobility of personnel involved in innovation process 3,00 inappropriate gender balance 2,88 2,40 low number of students and graduates in the relevant disciplines difficult working conditions 2,88 inappropriate gender balance Other: limited R&D finance resources of SMEs 4,00 2,75

2,77

low number of technicians

3,07

inability to attract international talent lack appropriate professional training of

3,00

inability to attract international talent

2,77

difficult working conditions

3,00

2,96

inappropriate gender balance

2,77

unattractive image of the sector

2,93

unattractive image of the sector

2,63

difficult working conditions unattractive image of the sector 2,30 difficult working conditions 2,00 Other: lack of effective learning tool 5,00 Other: Lack of knowledge as to what ecoinnovation means (same in industry) n.a. Other: risks linked to the acivity 5,00

2,23

lack of appropriate professional training

2,87

2,22

difficult working conditions

2,38

unattractive image of the sector

1,85

inappropriate gender balance

2,07

1,56

inappropriate gender balance 5,00

2,35

Other: skills

language

5,00

Other: regulatory environment

5,00

Other: proper financing of start-ups in biotech

5,00

Other: lack of career development from science to management Other: revenue 4,00

n.a.

47

Annex 8: What factors are the main drivers of innovation collaboration (values from 1-least important to 5 -most important) average assigned values - survey results
Eco-Innovation (10 respondents)
Factors Aver age Factors Aver age Factors Aver age Factors Aver age Factors Aver age

Automotive (15 respondents)

Biotechnology (16 respondents)

Food/Drink (8 respondents)

ICT (9 respondents)

Space (6 respondents)

Textile (9 respondents)

All sectors (76 respondents)

Factors Aver age

Factors

Aver age

Factors

Aver age

previous collaboration/s hared experience funding opportunities for collaborative projects 3,78 previous collaboration/share d experience 4,50 4,50 4,33 previous collaboration/sha red experience previous collaboration/sha red experience

4,46

previous collaboration/sha red experience

4,53

previous collaboration/s hared experience

4,89

previous collaboration /shared experience

4,38

informal contacts 3,33 3,63 4,13 informal contacts

3,54

funding opportunities for collaborative projects previous collaboration/share d experience funding opportunities for collaborative projects

4,33

funding opportunities for collaborative projects

4,33

funding opportunities for collaborative projects

4,56

funding opportunities for collaborative projects

3,89

belonging to the same sector 3,11 3,38 3,38

3,15

participation in conferences, seminar, fairs etc. same nationality/shared language same nationality/shared language funding opportunities for collaborative projects

3,27

informal contacts

3,83

informal contacts

3,78

informal contacts

3,37

belonging to the same professional community geographic proximity 3,11 3,25 belonging to the same sector participation in conferences, seminar, fairs etc.

3,08

informal contacts

3,20

3,38

belonging to the same sector

3,50

participation in conferences, seminar, fairs etc.

3,44

participation in conferences, seminar, fairs etc.

3,03

funding opportunities for collaborative projects informal contacts 2,78 informal contacts 3,25

3,08

labour mobility

2,73

same nationality/share d language

3,13

belonging to the same professional community

3,33

membership of formal associations

3,00

belonging to the same sector

2,94

labour mobility belonging to the same sector 2,67 labour mobility

3,00

belonging to the same professional community

2,73

3,00

belonging to the same sector

3,13

participation in conferences, seminar, fairs etc.

3,17

belonging to the same professional community

3,00

belonging to the same professional community

2,90

participation in conferences, seminar, fairs etc. participation in conferences, seminar, fairs etc. 2,67

2,77

geographic proximity

2,73

belonging to the same professional community

2,75

geographic proximity

3,00

membership of formal associations

2,67

geographic proximity

3,00

geographic proximity

2,77

48

same nationality/sha red language 2,56 3,00 labour mobility 2,50 labour mobility geographic proximity 2,63 2,78

2,62

belonging to the same sector

2,47

belonging to the same professional community

belonging to the same professional community

labour mobility

2,73

geographic proximity labour mobility 2,56 2,50 labour mobility 2,75 2,33

2,62

membership of formal associations geographic proximity belonging to the same sector

2,40

participation in conferences, seminar, fairs etc.

2,67

same nationality/s hared language 2,67 membership of formal associations

2,69

membership of formal associations membership of formal associations 2,22 2,50 2,13 2,00 membership of formal associations

2,54

same nationality/share d language

2,13

membership of formal associations

same nationality/share d language

same nationality/sha red language

2,48

Other: inspiring environment Other: information 5,00 5,00 5,00 Other: complementaritie s of interest

5,00

Other, Necessity

5,00

Other: innovation planned with midlong term objectives

Other: clear commercial benefits to both parties with alow level of risk

5,00

Other: creativeness of the actor

n.a.

Other: decision making capability of leaders Other: financial support 3,00

5,00

Other: Animation and facilitation of collaboration/opp ortunities

n.a.

Other: existing internal resources 5,00

4,00

Other: potential to get commercially useful results Other: sharing the same vision on the future of the (sub) sector

5,00

49

Annex 9: The food and drink industry in each Member State, 2004-2005

Source: CIAA (http://www.ciaa.be)

50

Annex 10: Household consumption expenditure in the EU: food and alcoholic beverages, 2005 (% of total household consumption expenditure)

Source: Eurostat, 2005

51

Annex 11: Food policy, old and new

52

Annex 12: The most innovative sub-sectors worldwide, 2005 (share in %)

Source: World Innovation Panorama 2005

Annex 13: Share of the main trends within the categories for innovation in Europe, 2004-2005 (%)

Source: World Innovation Panorama 2005

53

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