Public funding and Innovation – NITEC: The Portuguese case

Abstract

The topic of innovation and of economic development is unavoidable in national and international policies, as those are also fundamental to the daily life of firms and universities, as well as for each one of us as an element of change. To modern economies, innovation is crucial for the firms’ performance. Therefore, governmental entities have built and endorsed initiatives and programs to promote innovation in firms. The European Innovation Scoreboard (European Commission, 2022) states that EU Innovation performance has increased by “about 10%-points since 2015 and there has been noticeable progress in the EU’s global position”. Public funding is ultimately a political instrument to increase the number of resources allocated to innovation activities. Financial subsidies have been the main instrument used by most of OECD countries to stimulate research and development activities (Gonsáles & Pasó, 2008). In this sense the aim of this paper is to understand what the outputs of an innovation incentive instrument in Portuguese firms were, considering internal innovation processes. Moreover, after the pandemic crisis, innovation became even more a critical topic, since the technological transformation has accelerated and from those derived transformations in human capital, technology, and technological access, to name a few. According to the Global Competitiveness Report 2020 countries should “expand public investments in R&D”, as well as “create incentives that favour patient investments in research, innovation and invention” (Schwab, Klaus, Sahidi, 2020, p.6).  It is important to consider the impact of political strategies and orientations have on the promotion of firms’ innovation capacity and the way it is translated into innovation. In the scope of this study, it was select an incentive program to innovation, translated into the establishment of research and technologic development nuclei (NITEC- Núcleos de Investigação e Desenvolvimento Tecnológico – NITEC) on firms. This paper attempts to highlight the need to different and more qualitative approaches on the impact of public funding on innovation in private firms. It investigates the Portuguese case, since it was here that the RDI (research, development and innovation)  norm was created and has a direct link with public funding strategies.