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Appendix A5: The Carnot Initiative in France
Pages 368-389

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From page 368...
... They engage in 7800 direct annual research contracts with companies generating total revenues of about 350 million Euros. Roughly half of the institutes' research is financed by companies.2 1 Carnot exemplified "applied research that [yielded]
From page 369...
... During the trente glorieuses (thirty glorious years of postwar economic expansion) , the government held a large ownership stake in the economy, provided financial backing for "national champion" companies, and tasked public applied research organizations with executing grandes programmes, large-scale R&D programs to support the development of strategic industrial sectors.
From page 370...
... CNRS scientists accounted for numerous Nobel prizes but were relatively uninterested in applied science or technology development.6 The lack of cooperation between public research organizations and French industry had long been lamented by policymakers.7 Historically, most corporations have demonstrated a low level of interest in R&D.8 The French educational system has been chronically unable to produce sufficient numbers of qualified graduates with the skills needed by French industry and the research base.9 Most of the best students at the Grandes Ecoles, the elite universities that train the country's science, business, and government leaders, showed little interest in doing research or obtaining doctorates.10 President Francois Mitterand's 1983 "tournant de la rigeur" (roughly, turn to austerity or U-turn) laid the foundations for a wave of privatizations and the systematic dismantling of the institutions of the dirigiste state.
From page 371...
... Pursuant to the law the Agence Nationale de Valorization de la Recherche (ANVAR) was tasked with administering a special fund to promote innovation, particularly by SMEs.14 In the same year, France introduced research tax credits, which reimbursed companies for one-half of the increase in their R&D expenditure, a measure patterned on a comparable credit in the United States.15 By 1987, 3500 firms were applying for the credit annually, a figure which more than doubled in the subsequent decade, with recipient firms benefitting from tax reductions or reimbursements totaling 3 billion francs per year.16 The credit was modified in 2004, 2006, and 2008 in a manner that transformed it into "France's most powerful innovation support tool." In 2009, the R&D tax credit was worth 4.7 billion Euros to French industry, equaling 60 percent of all government funding to industry.17 The 1982 law also provided the framework for "an explosion of links" between private and public sector research that was so pervasive that two decades later it was "no longer possible to speak of a separation between private 13 European Commission, Directorate-General for Research, ERAWATCH Country Report 2008: An Assessment of Research System and Policies -- France, EUR 23766 EN/2Y, 2009, p.
From page 372...
... 446. A 1994 study of the French national innovation system observed that "relations between public research and the enterprise sector…is one area where changes were deepest over the last year, thus rendering the critique of academic research as unrelated to the enterprise sector no longer pertinent today." Phillipe Mustar, "La Politique d'innovation en Frances: le Colbertisme Entame" in F
From page 373...
... high-tech executives like Steve Jobs, Bill Gates, John Chambers, and Michael Dell.24 An extensive effort was made to reach out to entrepreneurs and industrial leaders but also to social interest groups affected by new institutional arrangements "that promoted risky high-technology start-ups without undermining the institutional foundations of French capitalism."25 A 2009 assessment of the French innovation system by the European Commission's Directorate-General for Research gave the country high marks for its public funding of R&D but noted that "domains of world level scientists and technological excellence exist, but are often specialized in stable/mature research fields." The Directorate cited "poor knowledge circulation between academic research (universities/CNRS) and business and noted "low demand for research outcomes from potential new companies."26 In 1999, France enacted the Innovation and Research Act, which prioritized the creation of new innovative firms and the transfer of learning from 22 "French companies in general and small/medium companies in particular do not devote sufficient resources to R&D." European Commission, Directorate-General for Research.
From page 374...
... , established in 2005, was tasked with financing research projects and managing innovation programs, such as the Carnot Institutes and the research projects that are part of the competitiveness clusters. The ANR operates on the basis on annual calls for research project proposals, and selects projects based on scientific and technical excellence criteria based on peer review evaluation.29  The OSEO Group, formed by the merger of a number of government organizations, emphasizes the promotion of innovation by small and medium enterprises (SMEs)
From page 375...
... Competitiveness Clusters In 2004 the French government launched an ambitious "Competitiveness Clusters" (pôles de compétitivité) initiative seeking to promote interaction between companies, educational institutions, and public research organizations within limited geographical areas.
From page 376...
... Advanced Thematic Research Cluster (RTRA) Based on legislation passed in April 2006 on Thematic Networks for Research, this program supports "research and higher education actors who want to launch together a specific scientific project of high-quality and international visibility giving them a global scope."32 THE CARNOT PROGRAM The Carnot initiative arose out of the Pact for Research, which sought to reinforce the activities of existing public research institutes that were already involved in research partnerships with private and/or public entities.
From page 377...
... Because the Carnot institutes are public organizations, over half of their funding is derived from various government sources in the form of core funding or research contract revenue.34 However in 2011, the institutes were also generating about 350 million Euros from partnerships with industry, of which 60 million Euros was from SMEs. Partnerships between Carnot institutes and companies take a number of forms:  Direct partnership research contracts with companies; 34 The UK's 2010 Hauser Report, which surveyed a number of applied research organizations, indicated that in 2008, the Carnot institutes received 59 percent of its income from core and other public funding.
From page 378...
... 378 21ST CENTURY MANUFACTURING TABLE APP-A5-1 Overview: Carnot Institutes Annual budget Institute Core Business Key Applications (million €) Personnel 3BCAR Chemistry Renewables 46.2 836 ARTS Materials, Energy, ICT 82.0 1,260 mechanics, processes BRGM Energy, Minerals, 108.0 989 environment, earth environment sciences CALYM Life sciences Treating 14.6 301 lymphoma CEA LETI Microelectronics, ICT 225.0 1,539 nanotechnology CEA LIST ICT Telecom, 58.5 681 robotics, metrology CED2 Chemistry, energy, "Green 19.1 303 environment chemistry" Cetim Materials, Manufacturing, 39.0 900 mechanics, energy transport, processes logistics CIRIMAT Materials, Aerospace, 11.0 213 mechanics, energy, health processes CSTB Building and Construction 34.6 351 territory management Curie Cancer Life sciences, Cancer treatment 21.8 247 health Energies de Energy, Energy, 130.0 1,555 futur environment renewables ESP Energy, Energy and 25.3 310 environment propulsion systems
From page 379...
... APPENDIX A5 379 I@L Building, Construction, 61.5 1,328 materials, health, mechanics, manufacturing, processes transportation ICEEL Energy, Sustainable use 73.0 1,435 environment, earth of natural sciences, resources, green materials, industrial mechanics, processes processes ICM Life sciences, Treatment of 29.6 397 health brain, neurological diseases ICSA Life sciences Animal health 66.1 954 IFPEN Transportation, Transportation, 41.5 363 Transports fuel propulsion, energy, Energie engines environment Ifremer Earth sciences Development of 13.0 246 EDROME marine resources INRIA ICT Telecom, 255.0 3035 aeronautics, software, energy, health care ISIFoR Energy, Sustainable 30.5 474 environment engineering of fossil resources LAAS CNRS ICT, ICT, robotics, 32.3 522 microelectronics, Microsystems nanotechnology LISA Chemistry, life Exploitation of 8.4 166 sciences, health lipids LSI ICT, life sciences Software 16.5 520 M.I.N.E.S ICT, energy, Clean energy, 80.5 1820 materials, green building, mechanics, materials processes, earth engineering, sciences intelligent systems
From page 380...
... 380 21ST CENTURY MANUFACTURING TABLE APP-A5-1 Continued Annual budget Institute Core Business Key Applications (million €) Personnel MICA Chemistry, energy, Functional 64.9 879 micro- and materials nanotechnology, materials, mechanics, processes ONERA ISA Transport, engines, Aerospace 14.7 860 fuel, materials, mechanics, processes PASTEUR Life sciences, Infectious 71.5 772 MI health diseases PolyNat Chemistry, Biosourced 15.9 273 materials, materials mechanics, processes Qualiment Life sciences, Food products 42.9 516 health STAR Chemistry, energy, Aeronautics, 29.4 650 environment, energy, health, materials, ICT, transport mechanics, processes, ICT, microelectronics Telecom & ICT ICT, ICT 71.7 2,200 Societe applications Numerique Voir et Life sciences, Vision and 13.8 236 Entendre health hearing SOURCE: Association Instituts Carnot, .
From page 381...
... . A number of them are public research organizations which were founded during the dirigiste era and at one time executed grandes programmes, and which have reoriented their mission and approach in recent decades.35 In contrast to Taiwan's ITRI and Germany's Fraunhofer-Gesellschaft, some of the Carnot institutes engage in basic as well as applied research.
From page 382...
... Evaluations French public research organizations, including Carnot institutes, are periodically subject to external evaluations supervised by the government Agency for the Evaluation of Research and Higher Education (AERES)
From page 383...
... operate a multi-purpose production platform for advanced materials, tools for materials deposition, and clean rooms.41 Some institutes, such as Carnot CETIM, are virtually entirely dedicated to industrial automation technologies and systems, simulation of industrial processes, metrology, and other themes directly relevant to manufacturing.42 CETIM's website details 120 recent projects that have boosted competitiveness of French industry, generally through incremental improvements in materials and industrial production processes. Some examples:  AEML: France's AEML Company (Ateliers Electriques et Metallurgiques due Loiret)
From page 384...
... CETIM engineers proposed that the company set up an automated and continuous process involving the preparation of paint, in-line feeding of electrostatic pulverizing guns, and a control system measuring consumption using flowmeters and volumeters. The new process cut VOC emissions by 50 percent and yielded a 30 percent reduction in paint consumption during the production process.45 Networks The Carnot institutes comprise a major network covering many of the competencies necessary to sustain a high technology economy, including information and communications technology, microelectronics, construction, factory automation, energy, medicine, chemicals, and advanced materials.
From page 385...
... The Carnot Institute ARTS (Actions on Research for Technology and Society) , for example, which specializes in engineering, is led by the engineering school Arts & Metiers Paris Tech and has research partnerships with five universities and seven public research organizations including CNRS and CNAM (Conservatoire National des Arts et Metiers)
From page 386...
... Carnot CEA LIST (smart digital technology) alone is involved in about one hundred FP7 projects, including 12 in which it is the project leader.52 Spin-off A number of institutes receiving the Carnot designation had already established a long history of spin-offs, a practice that continues under the Carnot initiative.
From page 387...
... , which are intended to provide SMEs with pooled resources (people, equipment, associated services) to support innovative projects and R&D.60 INRIA INRIA, a Carnot institute specializing in computer science, has the largest budget and professional staff in the Carnot network, and is recognized as one of the best institutions of its kind in the world.
From page 388...
...  The Fraunhofer Institute for Interfacial Engineering and Biotechnology IGB and the Institut Carnot CIRIMAT launched a joint project to develop bone tissue using innovative biomaterials for use in surgery.  The Fraunhofer Institutes for Physical Measurement Techniques IPM and the Institut Carnot IEMN undertook a joint project to develop antennas for terahertz radiation for security controls on substances such as drugs and explosives.64 CONCLUSION The Carnot initiative is one facet of a broader effort by France to improve its innovation system in a manner that will improve the competitiveness of French industry and create jobs.
From page 389...
... At the same time, even if highly successful, the Carnot initiative, standing along, cannot remedy some of the more intractable weaknesses in the French innovation system, such as manpower shortages, the acknowledged shortcomings of the educational system, chronic underinvestment in research by industry, and the comparative lack of interest by young people in careers in engineering and science.66 In 2011, five years after the inception of the Carnot initiative, a study by two French academics concluded that research cooperation between public and private sectors in France contributes less to companies' innovation capacity than is the case in Germany, based on an econometric study of the share of innovative products in total turnover. The European Commission attributed these findings to the difficulty encountered by companies in cooperating effectively with public research organizations, the complexity of the knowledge-transfer system, and the difficulty private companies experience in finding the right research partners.67 These findings underscore the fact that addressing the challenges facing France in innovation will take a major effort spanning many years.


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