Innovation Systems in Economic Development by Paul Benneworth


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  • Innovation Systems in Economic Development by Paul Benneworth

    1. 1. Innovation systems in economic development: developing dynamic social networks Dr. Paul Benneworth Center for Higher Education Policy Studies (CHEPS), University of Twente, the Netherlands. Paper presented to Cities as seedbeds for innovation, International Conference of Indonesian Development, Erasmus ISS, the Hague, 12th-14th September 2013.
    2. 2. Acknowledgements  OECD Regional Innovation Strategy Project ◦ All comments on a personal basis  Conference Organisers  Conference Sponsors & Hosts
    3. 3. Introduction & Overview  Economic development and innovation communities  Importance of global-local connectivity to driving economic upgrading  Identifying & promoting sites of innovative networking  Towards a new policy framework for stimulating dynamic innovation networks
    5. 5. The innovation imperative It is Indonesia‟s capacity to innovate that will drive productivity growth, and lead to a tripling of GDP by 2025, and not natural resources. Dr. Lukita D Tuwo, Vice Minister of National Planning and Development, ICID Conference, 13th September 2013.
    6. 6. Innovation, economic growth & proximity: an orthodox view  Increasing importance of innovation to economic development  Innovation based on creating/ exploiting new knowledge combinations  Creating new combinations involves knowledge exchange between people  Effectiveness of knowledge exchange requires proximity of exchanging actors
    7. 7. Innovation communities Source: Gertner et al. (2010)
    8. 8. Community of Practice Knowledge Producer (university/ academics) Knowledge Exploiter (firm/ researcher) (Inter)national technology transfer associations – AUTM, AURIL, AIRTO (Inter)national policy communities: EU, OECD, UNU Research Funders Publishing Outlets Ranking organisation s Learned societies Research Partners R&D Services e.g. Metrology Research Partners Research Subsidiser s Corporate Partners Suppliers & customers R&D Services e.g. Metrology Standards‟ bodies Knowledge linkages in CoPs
    9. 9. Local sites, global knowledges  Local spaces of knowledge combination ◦ People critical – roles shift, networks grow  Often emphasis on local sites ◦ Global networks equally important  From „everything everywhere‟ to locally situated knowledge ◦ Certain activities host global-local communities  Global-local anchors connect & embed
    11. 11. Economic development as a connectivity challenge  Innovation success network- dependent ◦ Anchoring innovation communities locally  Economic upgrading raising performance ◦ Better using assets  new opportunities  Evolution – creating/ exploiting new paths ◦ New combinations and potentials?  Where are the network „structural
    12. 12. Two variables describing connectivity A1 A2 A4 A3 a. Isolated G1 G2 G3 A1 A2 A4 H1 b. Single Hinge G1 G2 G3 Region Region c. Multiple Hinge G1 G2 G3 Region H3 H4 H1 H1 A1 A2 A4A3 a. Centralised A1 A2 A4 A3 b. Dense decentralised A1 A2 A4A3 c. Sparse decentralised a. Centrality (internal connectivity) b. Hinge Linkages (external connectivity)
    13. 13. No Hinges Single Hinge (opp) Single Hinge (alt) Diverse Hinges Centralised Decentralised Dense Decentralised Sparse Typology of network connectivities
    15. 15. Key Hinges building connectivityType of hinge activity Hinge activity stimulating local connectivity Hinge activity stimulating global connectivity Large-hub firm Encouraging cluster-building and knowledge circles between MNC and SMEs Subsidies for R&D with world-leading research activities elsewhere Related diversity firm activities Supporting cross-sectoral shared innovation projects and networking activities Encouraging local firms in sourcing knowledge from world-leading institutes Cluster-firm network-industrial district Upgrading the innovation capacities of local businesses in the industrial district Marketing the collective capacity of the local entity globally, building up a global industrial district brand Relay centres Innovation vouchers to help SMEs access knowledge located elsewhere Mentoring schemes to help local firms to absorb knowledge created elsewhere Universities & public RTD infrastructure Technology transfer office helping local SMEs to identify knowledge needs and absorb university knowledge Supporting participation in collaborative, multinational innovation and research projects pursuing global excellence Physical infrastructure Upgrading local/ regional accessibility and feeder infrastructure to support its wider role Affirming the importance of the place as a centre of particular transport/ distribution networks with other public policies Epistemic communities Supporting post-qualification education for local agents on basis of external standards (e.g. MBA) Overseas visits and delegations to build connections with people in similar situations elsewhere Source: Benneworth & Dassen, 2011.
    16. 16. . Typology of innovation dynamics Building local clusters (Diversifying local supply chains) Addressing peripherality: building global connections Sustaining critical mass and world- leading position Improving global profiling & markets Global Connectivity High HighLow Low Local density
    17. 17. Four kinds of connectivity repertoire  Connecting globally (red): Building a global pipeline: finding a point of connection from the region to key global actors  Cluster-building (blue): Improving local networking to connect more local actors into the growing regional network  Sustaining momentum (yellow): Building up new regional hinges with connections to regional firms – building critical mass.  Deepening pipelines (green): extending hinge connectivity & networks around hub
    18. 18. 4 different „flavours of science park‟  Regions lacking global hinges, science parks as technology poles, global actor „soft landing‟ programmes for foreign R&D investors, with connections to regional actors (cf. Crete Innovation Pole, IRE, 2008).  IF good local networks, some global connections, then science park a physical space for networking, building critical mass between actors.  Science parks can stimulate cluster-building, acting as innovation promotion centres, (IDEON in Lund) and providing physical links to universities.  Where there are strong regional connections, science parks can consolidate relationships between local firms, build wider innovation profile
    20. 20. An Indonesian Inspiration? A company based in Jakarta, with Global and US patents, based on research in the US and Spain, spun-out from an Indonesian university Dr. Warsito P. Taruno, Founder of Edward Technology Company
    21. 21. The new innovation policy paradigm  Global local innovation ◦ EU/ OECD Smart Specialisation ◦ Constructed regional advantage  Identifying local opportunities ◦ Connections to global value chains ◦ Existing innovation assets ◦ Opportunities for unique regional activities  So why is every region building a life sciences cluster?
    22. 22. A guiding rule for policy- makers  “Regional authorities and government agencies should not be paying excessive attention to building regional capability without carefully assessing and understanding the kinds of GPNs with which the region can have a good chance of strategic capacity” (Yeung, 2006, p. 31).
    23. 23. Problems in developing policy  Connecting globally: in these regions, the difficulty lies in understanding which latent and potentially externally- networked actors have the potential to be worth supporting as the basis for a better connected knowledge economy.  Cluster-building: the greatest issue here is in distinguishing between the different global connectivities of the latent and actual micro-clusters that exist in the region, and in particular in identifying which clusters are to be prioritised.  Sustaining momentum: the greatest issue in these regions is in addressing complacency and creating a sense of urgency; it is easy to have a politically desirable strategy and to describe it as a global-local perspective than to challenge the existing order.  Deepening pipelines: the clear difficulty here is in getting round the existing lead partners who dominate regional discussions and are able to configure strategy and policy outcomes to their own benefit.
    24. 24. Challenges for emerging economies CLUSTER-BUILDING 1. Improve innovation governance Identifying regional pockets of excellence & opportunities for related- variety spill-over effects. 2. Foster an innovation friendly environment Encouraging local co-operation to build mutual trust 3. Human Capital Development Universities leading micro-clusters as honest brokers; Supporting market research, technology analysis of cluster shared needs; Creating entrepreneurial labour market with business experience; Technology clubs etc. 4. Development of Research Infrastructure Shared R&D facilities; Use of university/ PRO/ Technology Centre as broker 5. a) Strengthen innovation in the SME sector Signposting services to reduce effort necessary for SMEs to access innovation resources. 5. b) Industrial policy and strategic technology policy Helping local businesses to fit into supply chains: ISO9001, industry standards; new products into existing markets; supporting proof-of- concept innovation projects 6. Develop innovation poles and clusters Brokerage: matchmaking, introductions, sign-posting, creating regional knowledge database; Industrial knowledge circles – technology clubs with lead actors involved. 7. Promote and sustain creation and growth of innovative enterprises Creating supportive spaces for new high-technology businesses; Support in accessing external knowledge sources; Ready provision of high- technology entrepreneurship resources (finance, IP, skills)