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2013.08.05.I author: European Association of Development Agencies -

Application of the Balanced Scorecard Methodology in Lower Austria’s economic and innovation policy

The Department for Economic Affairs, Tourism and Technology (WST3) of the Government of Lower Austria is responsible for coordination and implementation of regional economic and innovation strategy 2015. WST3 is the implementing body of the ERDF, Regional Operational Programm Lower Austria for economic, innovation and technology measures in very close collaboration with the ROP managing authority RU2, the department for Economic Development of the Government of Lower Austria.

As regional innovation is of utmost importance for the competitiveness of the whole region, Lower Austria WST3 has started the Continuous Improvement Process of the Regional Innovation System Niederösterreich (CIP RIS NÖ) more than 15 years ago. For this CIP RIS NÖ Lower Austria was awarded by the Assembly of European Regions (AER) as most innovative region in Europe in 2008 in terms of its innovation policy. Nowadays Lower Austria is well known in Europe for its RIS3 policy (Research and Innovation Strategies for Smart Specialisation) as Continuous Improvement includes also RIS3 issues like focus on key technologies, clear policy priorities, need oriented policy mix, a strong RIS network and long-term result orientation.

Monitoring the impact of its economic and innovation policy is of course also an integrated part of Lower Austria’s RIS3 implementation with application of a broad bundle of instruments on project, program and regional strategy level. One of these instruments is the Balanced Scorecard System (BSC), which is applied for the regional Economic and Innovation Strategy as overall strategic framework for Lower Austria’s Economic and Innovation Policy. The “NÖ Overall BSC” documents the overall objectives of the regional innovation and economic policy, the target figures and the monitored achievements for these objectives.

The BSC Target Map defines the objectives for the 4 LEVELs “economy”, “company” (= clients of the regional policy), “performance (instruments and process)” and “learning” in answering the following questions:

  • Which economic targets do we want to achieve? (level 1)
  • What has to be achieved by our clients in order to meet the economic goals? (level 2)
  • What do we need in terms of tools and processes (level 3)
  • What do we have to learn and to improve in order to run the instruments and processes effectively (level 4)

For every level 3 to 4 objectives are defined, each objective has minimum one indicator, but in average up to 5 indicators with concrete target figures.

The “NÖ Overall BSC” indicators of LEVEL 1 – economy and partly LEVEL 2 – clients are mainly macroeconomic ones, which are available via Eurostat, Statistik Austria or The Lower Austrian Chamber of Commerce. Another source of data are the regionalised Community Innovation surveys (CIS) every two years, the national R&D surveys every two years and further surveys of statistical experts ordered by the Lower Austrian Government. Impact is monitored e.g. in terms of GDP, quality of life, purchasing power, companies’ turnover and profit in several branches. Input is monitored e.g. in terms of annual budget allocation and number of full- time equivalents. Output is monitored e.g. in terms of total number of researchers in Lower Austria, R&D expenditure of companies, employment in medium/high tech manufacturing and high tech services, number of active locations of an enterprise and further more.

In a second step this “NÖ overall BSC” was broken down for single programs, the so-called “Program BSCs”. In coordination with WST3 every program manager and related service provider decide about their contribution to the “Overall BSC” and the objectives for the 4 BSC levels by asking the questions: what has to be the objective of our program in order to contribute to objective x of the “NÖ overall BSC” and what we can really influence ? This break-down approach is ensuring the link between program objectives and overall regional objectives, even though there is no mathematical equation like “Result of objective of NÖ overall BSC = sum of results of linked objectives of program BSCs”.

The Program BSC is applied by public/semi-public intermediaries in regional economic and innovation policy. All programs of Lower Austria’s economic and innovation policy are covered by the BSC method.

Application of the Program BSCs is a continuous in monitoring process. Twice a year bilateral review sessions are organised with every program responsible intermediary. In these review sessions the current up-to-date achievements are discussed and compared to the target figures of the program objectives. If necessary an amendment of the target figures can be done. Thus the Program BSC is flexible and is taking new insights into consideration, not insisting on outdated target figures agreed on few years ago and turned out as unrealistic. In the reviews challenges and highlights of the program and services results are also discussed as well as new potential topics for the program with related services. In the review session at the end of the calendar year the planning for the next year is being discussed and negotiated, but not the budget as this is fixed for the whole programming period.

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