RUICS 2004 Regione Umbria Innovation and Competitiveness Scoreboard

Lucio Caporizzi Region of Umbria, Perugia (Italy) www.regione.umbria.it [email protected]

RUICS 2004 “Regione Umbria Innovation and Competitiveness Scoreboard”

The aim of the RUICS 2004 is to create and develop an analytical tool for the evaluation of the dynamicity and competitiveness of the region’s economy, in keeping with the Lisbon policy. To this end, a series of indicators have been designed to describe the regional framework for the evaluation of Umbria’s competitiveness and innovative capacities. It evaluates the capacity of a local area to develop its own competitive potential and/or develop innovation. The creation of this instrument is necessarily based on those models elaborated by diverse international research centres using specific indicators (benchmarks) designed to measure such phenomena:  The European Innovation Scoreboard (EIS) elaborated by the EU Commission;  The Growth Competitiveness Index (GCI) elaborated by the WEF (World Economic Forum) of Geneva, organiser of the annual Davos Forum;  The “World Competitiveness Yearbook” elaborated by the International Institute for Management Development in Lausanne.

It would seem a good idea here to formulate a broader, more original evaluative tool that, based on the EIS methodology and “philosophy”, proves capable of describing and measuring not only Umbria’s innovative potential, but also its competitive capacity.

This analysis, which is still only conducted in a small number of European regions, and in Italy by the Lazio region alone (where it is limited to the sphere of innovation only), enables us to gain an idea of Umbria’s competitive position compared to Italy’s other regions, to the country as a whole and to other European regions, despite the clear difficulty there is in finding suitable, reliable figures.

To this end, three different summarised indices have been formulated:  The RUIS 2004 for Umbria (Umbria Region Innovation Scoreboard), elaborated using those EIS methods provided for in European Commission documents (SEC 2004 1475 of the 19.11.2004), and designed to measure the innovative capacity of the regional economic system;  The RUMES 2004 for Umbria (Umbria Region Macroeconomic Environment Scoreboard) elaborated, once again, using the EIS method and taking account of the indicators used by the WEF for building the GCI, and designed to assess the competitive potential of the region’s macroeconomic environment;  The RUICS 2004 for Umbria (Umbria Region Innovation & Competitiveness Scoreboard), which synthesises the various indicators used, and is designed to measure the competitive growth potential of Umbria’s economy. Each of the above indices is composed of a series of simple indicators grouped together according to subject. In synthesis:

N. key Synthetic index Index Areas indicators Human resources 5 Creation of knowledge 6 Transmission and application of RUIS 2 knowledge RUICS Financial, product and market- 6 structural innovation Openness towards the outside 5 RUMES world Economic growth 6

The document contains an initial section describing the nature of the system of indicators, the methodology used for standardising the said indicators and the weighting system employed when elaborating the indices.

It then provides a graph of the regional economy’s competitive position, for each index, in the fields of innovation and macroeconomic performance, complete with a brief analysis of the Umbrian situation compared with that of other Italian regions and with the European average. Finally, the document presents observations and a short evaluation of the weaknesses, critical points and strengths of the regional system compared with those of other local areas.

The adopted working method first envisages the definition, and then the measurement, of the simple data composing each of the key indicators. Subsequently, in order to elaborate the above-mentioned synthetic index, the values obtained need to be “standardised” (that is, they need to be placed within a coherent scale of values, given that they represent complex phenomena comprised of dimensions that are not always measurable in a homogeneous fashion).

For each of the broad subject areas, a summarised picture of the indicators was organised, showing the various elements being analysed, the source and year of the figures, the leading region and the position of Umbria in relation to the national average.

Umbria’s position Subject areas Indicators employed Leading region compared with the national average Graduates in scientific-technical EIS 1.1 Basilicata = subjects EIS 1.2 Population with higher education Lazio + Human EIS 1.3 Involvement in continuing education Emilia Romagna + resources Employment in high-tech or EIS 1.4 medium-tech manufacturing Piedmont - Employment in high-tech or EIS 1.5 Lazio - medium-tech service industries Creation of EIS 2.1 Public expenditure on R&D Lazio + knowledge EIS 2.2 Private expenditure on R&D Piedmont - Patents in the high-tech sector EIS 2.3.1 Lombardy - submitted to the EPO Patents in the high-tech sector EIS 2.3.2 Emilia Romagna - submitted to the USPTO EIS 2.4.1 Patents submitted to the EPO Emilia Romagna - EIS 2.4.2 Patents granted by the USPTO Lombardy - EIS 3.1 Innovative manufacturing SMEs Basilicata + SMEs that innovate in a cooperative EIS 3.2 unavailable unavailable way Transmission Piedmont and and application Expenditure on innovation in the EIS 3.3 Friuli Venezia - of knowledge manufacturing sector Giulia SMEs adopting non-technological EIS 3.4 unavailable unavailable changes Venture-capital investment in high- Friuli Venezia EIS 4.1 - tech Giulia UMBRI Net rate of foundation of new Sardinia - A 4.2 companies EIS 4.3.1 Sales of new products unavailable unavailable Financial, Sales of manufactured products that product and EIS 4.3.2 are new to the company but not to Lazio - market- the market structure EIS 4.4.1 Family use of Internet Lombardy = innovation EIS 4.4.2 Company use of Internet Lombardy + UMBRI Websites of associations Trentino + A 4.4.3 EIS 4.5 ICT expenditure Lazio - UMBRI Companies in the IT sector Lombardy - A 4.6 UMBRI Exports against GDP Veneto - A 5.1 UMBRI Exports of high-tech goods against Lazio - A 5.2 total exports UMBRI Rate of coverage of the sales of Openness to the Sicily + outside world A 5.3 high-tech goods UMBRI Technology balance of payments Lazio - A 5.4 receipts against GDP UMBRI Net direct foreign investment by the Piedmont - A 5.5 region as a % of GDP UMBRI Economic infrastructural index Liguria - A 6.1 UMBRI Average annual GDP growth rate - Sicily - A 6.2 1999-2003 UMBRI Average annual growth rate of Friuli Venezia investment - - Economic A 6.3 1998-2002 Giulia growth UMBRI Trentino Alto Capital accumulation rate + A 6.4 Adige UMBRI Labour productivity Lombardy - A 6.5 UMBRI Average annual growth rate of the Abruzzo - A 6.6 service sector 1999-2003

The result of this work is Umbria’s RUICS 2004 that provides those indicators we need in order to outline the region’s progress towards those objectives established by the Lisbon strategy. It represents an index of all the indicators employed, designed to measure the competitive growth potential of the Umbrian economy. The grafh representation (made for all key indicators and for the three index) shows the Umbria position in innovation and competitiveness, as above. RUICS 2004

Lazi 0.6 Lombardo 0.63 y 3 Friuli 0.5 V.G. 9 Piedmon 0.5 t 8 Emilia 0.5 Rom. 6 Venet 0.4 o 8 Tuscan 0.4 y Abruzz 0.41 oMarch 0.41 e 0 Trentino- 0.4 AA 0 Liguri 0.3 Umbria 0.39 a 6 Campani 0.3 a Sicil 0.32 y 1 Valle 0.2 D’Aosta 7 Basilicat 0.2 a 7 Apuli 0.2 a Calabri 0.26 Sardinia 0.26 a 6 Molis 0.2 e 5 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0 0 0 0 0 0 0 0 Source: Elaboration by the Umbria Region’s Department of Strategic Planning and Control

Umbria’s RUICS 2004 reflects and summarises those strengths and weaknesses that emerge from an analysis of all the indicators in question. Umbria ranks 12th in the Italian regional table, with a score of 0.36, below all the central and northern regions except for the Valle D’Aosta.

This position reflects: • A considerable capacity to educate and train workers capable of developing and applying innovation, compared with the national average; • Substantial public expenditure on R&D; • A high percentage of innovative small/medium-sized manufacturing companies; • The lack of any particular propensity towards financial, product and market innovation; • A rather mediocre rate of economic growth; • Low private spending on R&D and a low level of R&D productivity (as indicated by the low number of patents granted); • Low spending on innovation in the manufacturing sector; • Limited openness towards the outside world, with the exception of the rate of coverage of sales of high-tech goods.

It should be borne in mind, however, that this comparative analysis ought to include figures for the EU, whereas standardised EU figures are not available for all indicators. However, given Italy’s rather weak position compared with the EU, the gap between Umbria and the European average would be nevertheless considerable as a result thereof.

This work is an usefull instrument to create and develop an analytical tool for evaluation of the dynamicity and competitiveness of the Region’s economy, in keeping with the Lisbon policy and to compare Umbria’s performanceses with other Regions, UE and to analyze their evolution in the future. It is usefull:  In order to analize strenghts and weaknesses under several points of view to build and manage best innovation and competitiveness regional programmes  In order to analize a region benchmark compared with other territories, following its evolution year by year

This work is a “pilot” scheme designed to provide a useful instrument for the evaluation and analysis of vitally important questions pertaining to development in Umbria.