1. Norrköping 01042014
Tailoring the policy-mixes to the needs of priorities –
state of the art in innovation policy research
Vesa Harmaakorpi
Professor of Innovation Systems
Dean of School of Industrial Engineering and Management
Lappeenranta University of Technology

2. Innovation modes
 Science-based
 Science, technology, innovation (STI)
 Practice-based
 Doing, using, interacting (DUI)
Berg Jensen et al. 2007

3. Types of knowledge production
 Mode 1 knowledge production is traditional knowledge
production based on single disciplines. It is homogeneous
and primarily cognitive (STI).
 Mode 2 knowledge knowledge production, by contrast, is
created in broader, heterogeneous interdisciplinary social
and economic contexts within an applied setting (DUI).
Gibbons et al. 1994

4. Science-based innovation
(STI, Mode 1)
Practice-based innovation
(DUI, Mode 2a)
Practice-based innovation
(DUI, Moodi 2b)
Most typical logics
and capital
Agglomeration – Clusters –
Economies of scale
Intellectual capital –
Financial capital
Proximity
Related variety – Innovation
platforms
Social capital – Institutional capital
Distance
Developing innovation capability –
Breaking silos
Social capital – Structural capital
”Near distance”
Most typical
innovation types
and processes
Radical technological
innovations and related
concepts
Analytical
Radical concepts and system
innovations
Interpretative
Organisational innovations - Social
innovations - Service innovations
Interpretative
Most typical
innovation methods
and environments
and knowledge
transfer mechanism
Scientific methods
World class scientific centres
Technology diffusion for the
firms of cluster
Science and related expertise
Methods of intellectual cross-
fertilisation (also virtual)
Arenas of intellectual cross-
fertilisation in value networks
Scanning and absorbing technology
and market signals
Networks, Serendipity, Customers
Problem-based learning (e.g. culture-
based methods)
Arenas of developing organisational
innovation capability
Organisational learning
”Normal” staff, Customers
Most typical logics
of knowledge
production
World classic scientific expertise
in narrow field
Codifield knowledge
Analytical
Homogeneous knowledge
production
Brokering – General ability to build
possible worlds
Future-oriented
Synthetic
Heterogeneous knowledge
production
Brokering – General ability to build
possible worlds
Tacit knowledge
Symbolic
Heterogeneous knowledge
production
Most typical
communication
Integrative Dissipative Dissipative
Most typical
evaluation
Input-type measures
Output-type measures
Dynamic measures Dynamic measures
Differences in science-based
and practice-based innovation

5. Bringing STI- and
DUI-modes together
Mode 2 knowledge production -> DUI-mode of innovation
Mode 1 knowledge production -> STI-mode of innovation
Context of knowledge application
(companies and public sector organizations)
Policy instruments
and tools aiming at
promoting knowledge
transfer and utilization

6. Global threat of sustainable value creation
− ”Triple debt”
1. Ecological: Natural resources are 1,5 times over-utilized.
2. Economic: Europe, countries and municipalities are living on credit. We
are eating from the plates of our children.
3. Social: People feel bad under growing pressure.
Weakened competitiveness of companies, public sector and
society.
Preventing the triple debt is offers business opportunities for
regions.

7. Areas and challenges of sustainable value creation
− Development of innovation systems
− Innovation systems cannot respond to the challenges of open innovation
− Insufficient dialogue between science and practice leads to unnecessary use of
limited resources
− Exploitation of innovation potential is weak
− Development of management and processes
− Productivity is taken from people not processes
− Knowledge in organizations is poorly utilized.
− Benefits of networks are not used
− Development of ICT
− ICT is seen only from a technical point of view, not as part of business processes
− ICT is not applied in novel ways
− Openness is just on the way, closed systems prevent open innovation

8. Our response: Productivity innovations
“Productivity is not everything but
in the long run it is almost
everything” (Krugman 1994)
“Production and use of
knowledge is at the core of
value-added activities, and
innovation is at the core of
growth” (Archibugi and Michie
1995)
“Europe suffers of productivity
gap preventing sustainable
growth“ (EU)
“80% of growth is explained by
increased productivity; 80% of
the increased productivity is
explained by innovation”
(Cooke, 2005)
Development of
Innovation Systems
Development of
Management and
Processes
Development of
ICT
PRODUCTIVITY
INNOVATIONS

9. (Geels & Schot, 2007)
Transformation

10. Tools of Change
Intellectual cross-fertilization
User-driven processes
Making visible out of invisible
Drivers of Change
Triple debt: environmental, economic, social
New innovation philosophy
Globally networked digital society
 Structural silos
 Central planning
 Slow path-dependent
development
Old Mode of
Management
 Ability to build possible worlds
 Crowding and experiments
 Peer progressives
New Mode of
Management

11. Final words
 The concept of regional innovation policy has to be rethought based
on
 Modes of innovation
 Consequencies of triple debt
 Regional strengths and global niches including proper interaction
within the global context
 Smart specialisation is the European way to lead the transformation
process
 There is a great demand for proper road-maps and monitoring tools
in the regional processes

12. Book on practice-based
innovation
 Melkas, H. & Harmaakorpi, V. (eds.) (2012). Practice-
based Innovation. Insights, Applications and Policy
Implications. Axel Springer Verlag.