Introductory Lecture Innovation Studies and Development


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Introductory Lecture Innovation Studies and Development

  1. 1. An introduction to Innovation Studies and Technological Change Anthony Bartzokas UNU - MERIT 4 September 2006
  2. 2. Basic fact 1: Technology and Welfare
  3. 3. Basic fact 2: R&D and Economic Growth
  4. 4. Basic fact 3: Concentration of R&D activities (global 1000 leading R&D investors)
  5. 5. An overview: research on technology and innovation • History of ideas: technology and theorizing [progress, power, ethics, man vs. nature] • Technology per se was seen as given-like tastes • Schumpeter- innovation dynamics key to capitalism- • Adoption – migrant from sociology • Induce innovation-innovation as economic activity • Human capital-the dynamics of learning and accumulation of knowledge • Knowledge as a public good • Innovation as an economic activity • Technology and catching up • Innovation and dual structures • Social innovation
  6. 6. The Policy relevance of these research programmes • The development of scientific communities • Emphasis on basic research in the US • OECD and Innovation Policy processes • Technological Development in Developing Countries • Globalisation and diverging growth trajectories
  7. 7. Breaking down innovation Usually thought of as composing three or four activities, all of which are required to achieve productivity growth: – Invention – the conception of a new idea; prototypes – Development - reducing the new idea to practice – Commercialization – bringing it to the marketplace – Diffusion – the result of adoption by consumers Diffusion can be very slow The importance of some innovations initially greatly underestimated
  8. 8. A broad definition of Innovation Innovation is the creation and use of new products and processes, including: • use of new equipment or materials • use of new markets or sources of supply • new organizational forms • creation of completely new products • product modifications and restyling • selling in new markets or new segments N. Rosenberg ‘Transportation in boxes is one of the major innovations for the global economy’
  9. 9. Sources of Data • OECD • Technology spillovers data (variety of methodologies) • NSF • Measurement of technological assets in • Eurostat regional clusters • European Report on S&T indicators • Agriculture R&D (IFPR) • CIS and similar surveys • Research and technology collaboration • UNESCO report data • World Bank Innovation Database • Technology Diffusion (GPT) data • Firm level R&D data [IPTS, 700 larger • Technology transfer payments data firms] • Business Environment Data (World Bank) • Several patents data bases • Technological infrastructure data (various • Scientific publications sources, especially for ICT) • Country level Technology and Innovation • Scientific publications data statistics • ECLAC data base for the world economy • MNC R&D data (UNCTAD and national • Several sources of information on the surveys) quality of education • Corporate assets: several publications • Case studies and ad hoc reports with drawing on annual reports survey findings on a wide range of topics • Innovation and technological capabilities indexes (RAND, Porter, ArCo, UNIDO) • Knowledge flows studies A footnote: take the time to visit some of these sources on-line
  10. 10. An example STAN Indicators Database 2005 R&D INTENSITY using PRODUCTION Indicator: k ANBERD k i RDIP = x 100 i PROD ik Formula: Where: ANBERD and PROD are the business enterprise Research and Development and production at current prices, respectively. For zones, data have been converted to common unit using the Purchasing Power Parities for total GDP. For each country (or country group), this indicator expresses the R&D Description: expenditures by sector relative to the production.
  11. 11. A map of innovation inputs and outputs Market structure and industry; Appropriability environment Demand pull Firm size and (taste, market size) Market share, Tech. Opportunity R&D and other Diversification, (science base) Innovation investments And experience Knowledge Firm-level capital created By innovation investment Patents, Other IPR Innovative sales Innovation output Diffusion Outcomes: Productivity, Physical capital process Profitability, Worker skills And Economic Growth
  12. 12. The Innovation Development System: A Framework CUSTOMERS OTHER KNOWLEDGE INDUSTRY LINKAGE SOURCES Research Large TNC Knowledge Linkage, Institutes Transfer and Development Export Organisations Large Universities Domestic Metrology and Vocational Standards Training SME Domestic Foreign Start-Ups Technology Sources Policy and Incentive Systems Financial and Funding Systems Legal Frameworks Organisational Structures INSTITUTIONAL CONTEXT
  13. 13. Evolution of Industry Structure over the Life Cycle INTRODUCTION GROWTH MATURITY DECLINE DEMAND Affluent buyers Increasing Mass market Knowledgeable, penetration replacement customers demand TECHNOLOGY Competing Standardization Incremental Well-diffused technologies process innovation innovation technology PRODUCTS Wide variety, Quality improves Standard- Comm- poor quality Dominant design ization oditization MANUFACT- Short-runs, skill Capacity shortage, Deskilling Overcapacity URING intensive mass-production Overcapacity TRADE -----Production shifts from advanced to developing countries----- COMPETITION Few firms Entry, merger Shakeout & Price wars, & exit consolidation exit KEY Product innovation Process techno- Cost efficiency Overhead red- SUCCESS Establish credible logy. Design for High quality uction, ration- FACTORS image for firm & mfg. Access to Fast product alization, low product. Dist. Brands. development cost sourcing
  14. 14. Beyond simple metaphors… Research Programmes on Technology and Innovation Points of Departure – From markets to incentives for rational and identical agents and then to innovation – From agents (firms with asymmetrical capabilities) to markets and innovation – From structural incentives (production system characteristics) to incentives and innovation dynamics • Additional Questions: – What is the driving force behind asymmetrical capabilities (codified knowledge, corporate structures, core competences, networking…) – Stylized facts and the level of theorizing [general trends and valid metaphors: product cycle, waves, critical technologies, paradigms etc.)
  15. 15. Critical thinking is needed…Myths and their implications (i) Technology is (just) Applied Science Set up R&D Institutes (ii) Technological Self-reliance is Key, period Indigenization as end in itself (iii) More Technology is always Good Focus on R&D Spending, not Content or Value Added (iv) High tech is the Best technology Expensive, high-tech Champions, State or Private (v) Technology is well understood and easily transferred Focus on Regulation (vi) R&D is Key, and led by Research Focus on Research, not Development