Private Sector Involvement in Innovation Policy-making

Around the turn of the century, many countries recognized that new times require new solutions in science, technology and innovation policy-making.
More dynamic and more complex economic and social developments press governments to adapt their institutions and innovation policy-making to new requirements, as the governance of S&T and innovation policy becomes more knowledge-intensive. Innovation policy-making has progressed through three generations in the second part of the last century. The third generation of innovation policy calls for more adaptive and flexible approaches to innovation policy, and it also requires that new, more pragmatic public-private sector interfaces be developed.
This paper focuses on private sector involvement in policy-making. Business stakeholder participation and influence in innovation policy-making depend on many country-specific actors. The empirical research for this paper focused on three different aspects of private sector involvement such as the stages of policy-making, types of involvement and extent of involvement. This study first investigates how the private sector in Hungary is involved in decision-making on innovation policy matters one and a half decades after the beginning of transition. It then places Hungary in an international context and compares the involvement of the private sector in different stages of policy-making with two other transition economies and two of the EU-15 member states.
In the international context, the Hungarian practice is clearly dominated by its status as a transition economy. Comparing its performance to two new member states and two old member states, there are some striking differences. The intensity of the use of the 13 instruments compared is much lower in the transition economies (Hungary, Estonia and Poland) than in the EU-15 member countries in our sample (the Netherlands, Ireland). The initiators of these collaborations are mainly the policy institutions in all countries, but the private sector seems to be more active in the new member states. This is something to be studied in more detail, although it may only be indicative of the lag in acceptance of private sector role in policy-making (compared to their Western counterparts). Looking at the instruments by policy stages, it is noteworthy that Hungary employs mainly the same instruments as the Netherlands and Ireland, but less often; while Poland uses a much smaller variety of instruments and Estonia uses very different ones. In the design stage, the Hungarian private sector is comparatively much less involved than its counterparts in any other country. In the implementation stage, some joint activities are common for all countries, and the situation of Hungary is very similar to that of the Western European countries. During the evaluation stage, Hungary employs fewer instruments than any other country except Ireland. The differences are in the quality and frequency of use of these instruments. In the stages of instigation and design, the other two Central and Eastern European countries use many more instruments, which might be an indication of their ongoing learning process.
Altogether, in Hungary, Estonia and Poland the private sector involvement in R&D and innovation policy shows very similar patterns to the policy-making practice of Western European countries, however the intensity of use significantly lags behind the practice of Ireland and the Netherlands. In the fifteen years of transition, policy-making in Hungary has been upgraded somewhat, but this was achieved mainly through external pressure (EU, national government). Both the public and the private sectors still have to learn how to work together in ?participatory policy-making' to be able to form relevant and useful R&D and innovation policy.
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