Czechia targets knowledge transfer reforms to tackle ‘stagnant situation’ in innovation

06 Mar 2024 | News

The country has set out wide ranging reforms to promote commercialisation of high-quality research, but some think they do not go far enough to resolve deep-rooted problems

Czech Prime Minister Petr Fiala speaking at the opening of the conference to introduce the reform of knowledge transfer systems on January 25. Photo: Government of the Czech Republic

Czechia has launched a series of reforms aiming to improve the environment for commercialising research outputs and increasing the number of academic spin-offs, but those on the ground worry that these moves are not ambitious enough and have been shaped without reference to some of the country’s most innovative companies. 

At a January event kicking off the knowledge transfer reforms, Czech prime minister Petr Fiala said that the country has to step up its game in commercialising academic research, to boost competitiveness and increase the country’s strategic autonomy amidst global uncertainties and conflict. 

“The Czech Republic can boast research in a number of fields, which is truly at a top level,” he said. “However, we are still unable to use 100% of our potential. We have very clear gaps precisely in the connection between research and business.”

Over recent years, Czechia has narrowed the gap in its innovation performance compared to other EU countries. Since 2016, the country’s innovation performance has improved by 26%, with half of this increase taking place in 2023, according to the European Innovation Scoreboard

Despite this improvement, it is classified as a moderate innovator, with performance at 94.7% of the EU average. The deficits include insufficient government support for business R&D, lower per capita income and a slower-growing economy compared to other EU members. There is also a shortage of entrepreneurial training provision and the use of government procurement to encourage innovation.

The government response is a sprawling set of knowledge transfer reforms that includes 30 measures ranging from changes in legislation, to a new funding scheme and creating policy labs. The aim is to stimulate collaboration between academia and industry and translate research outcomes into practical use.

Pavel Doleček, deputy minister for science, research and innovation, told Science|Business the main reason for Czechia’s “stagnant situation” in knowledge transfer is mental barriers on the part of both academia and business. Scientists favour getting their research published over forming spin-offs, while businesses are not accustomed to turning to academic partners for help with product development

Doleček said the goal of the reforms is to drive cultural change and lift these barriers. From this perspective the reforms reach beyond the nuts and bolts of legislative changes and financial schemes.

But those on the frontlines of Czech innovation are not completely sold on this proposition. As one case in point, Martina Plisová, head of technology transfer at Institute of Biotechnology of the Czech Academy of Sciences, described the reforms as “not very ambitious”, saying, “This low ambition reflects reality.

Lack of incentives 

Her main gripe is that the reforms do not incentivise leaders of Czech academic institutions to focus on knowledge transfer. Boards of academic institutions are democratically elected by students and staff. The issue with that, Plisová says, is that no one sets strategic goals for these boards and no one reviews progress. “And because knowledge transfer typically is a marginal activity, especially for institutions doing basic research, this will always be a very low priority for the leadership,” she said. 

“Even if a leader was to make it a priority, it is very difficult. In their first term, they cannot change things dramatically because they seek to get re-elected in four years. Without goals and incentivisation of academic leadership, the change [to improve knowledge transfer] will be extremely slow, Plisová said.

Martin Dienstbier, chief financial officer at the biotech company DIANA Biotechnologies, says that despite some success stories, “it is probably fair to say that knowledge transfer in Czechia is still far from ideal.”

Issues, he said, include relying too heavily on government subsidies and grants rather than private investment, high bureaucratic and tax burdens, and a lack of willingness to support breakthrough technologies. 

On whether the proposed government reforms will address this, he says he does not have the full picture. “Neither our company nor several other innovative companies I know in our segment were consulted,” he said. “I also don’t think there were many discussions with the private capital sector. I am not sure if you can get a complex knowledge transfer improvement without these parties being involved.”

Interconnecting the system

The reforms aim to enhance two main forms of knowledge transfer: a science to business dimension, focusing on commercial use of research results, and science to policy, which promotes application of research outcomes in public policy. Doleček described the reforms as, “the first serious attempt to stimulate changes on both sides and to bring the demand and supply closer to each other.”

The measures are divided into six themes with the ultimate goal of interconnecting the entire system. These areas include business orientation towards research and development; promoting knowledge transfer within research organisations; strengthening the tech transfer ecosystem; creating a safe and transparent legislative environment; providing targeted and effective public support; and enhancing private investment. 

One of the core activities involves the revising R&D tax credits to stimulate private investments in research, particularly in small and medium-sized enterprises. Doleček said that SMEs that should be a driving force of innovation, currently do not have any meaningful tax incentives to carry out research.

“Lack of private funding can be explained by certain mistrust in the value of academic research. It then fails to provide a sufficient amount of applicable solutions, as it does not manage to evoke enough interest in the business partners,” Doleček said. Compounding this, public grant schemes end too soon to generate projects that are advanced enough for venture capital investors to take them forward

To strengthen private investment, the reforms also proposes collaborating with the European Investment Bank to establish a "fund of funds" for tech transfer activities, such as seed and pre-seed investments in academic spin-offs. 

Knowledge transfer

To explain Czechia’s difficulties in knowledge transfer, Adéla Píchová, chief of the start-up acceleration team at the Moravian-Silesian Innovation Centre, points a finger at the lack of a systematic approach to commercialising research outcomes. This goes hand in hand with an excessive focus on basic research without reference to possible applications.

Plisová believes mindset is amongst the key obstacles to oiling the wheels of knowledge transfer. “It starts at primary schools, where children are still punished for mistakes, for getting bad grades, rather than encouraged to learn from mistakes,” she said. “This leads to risk aversion from an early age, and to grow academic spin-off founders, you need people who take risks and are not afraid of failure.”

For Dienstbier, there are weaknesses in both academia and business. He says too often scientists target incremental research funded by public subsidies rather than breaking ground in new science. This is not helped by the fact that private companies are reticent to invest in groundbreaking technologies. 

“While it may sound like a chicken and egg problem, if you want to improve knowledge transfer [] you need to first establish a system which is supportive for innovative companies that already exist,” he said. 

“While everyone seems to agree that we want to be the country based on innovation, science, and [an] advanced tech economy, “Czech Republic, country for the future” is the slogan often cited by the politicians, I am afraid there is not enough being done to achieve it,” Dienstbier said.

While there is scepticism, both Plisová and Dienstbier both said that the new reforms could contribute to resolving some of the issues. 

David Hořínek, spokesman for CzechInvest, the Investment and Business Development Agency, also expressed hope that the reforms will improve things. While overcoming legislative obstacles is important, the biggest barrier is the “unenthusiastic” approach of universities and research institutes towards technology transfer and commercialisation of research results, and changing this will likely take a longer time, he said.

The ministry plans to implement the reforms by the middle of 2025. Although officially launched in January, many activities, particularly legislative changes, have been underway for more than a year, according to Doleček.

The key metrics for success of the reforms are the number of academic spin-offs, the number of international patent applications, and the amount of private investment in R&D. “These three should be significantly increased within the next five years,” he said, without specifying numbers. The indicators for the science to policy dimension include the number of newly established policy labs and new positions for chief scientific officers in government ministries.

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