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Transcript of Regional Innovation Systems Dr. Lisa De Propris Birmingham Business School Institute for Economic...
Regional Innovation Systems
Dr. Lisa De ProprisBirmingham Business SchoolInstitute for Economic Development Policy
Content
Sources of competitiveness What in innovation?
– Definition– Types of innovation processes– Features of innovation
Regional innovation system Cambridge: a successful case Birmingham: a RIS in the making
Levels of competitiveness
National– Macro-economic indicators (trade
advantages, employment (GDP per capita) and productivity)
– Social, political, administrative and legal framework
Local/ regional
Firm
Definition EU infrastructureinfrastructure
Competitiveness human capitalhuman capital
innovationinnovation
Business competitiveness: “capacity of a regional economy to generate, diffuse and utilise knowledgeknowledge and so maintain an effective regional innovation regional innovation systemsystem; a business culture which encourages entrepreneurship and the existence of cooperation cooperation networksnetworks and clustersclusters of particulars activities”
Third Cohesion Report, 2004:37
Definition Porter “Competitive strategy is the search for a favourable competitive position in an industry, the fundamental arena in which competition occurs …. aims to establish a profitable and sustainable position against the forces that determine industry competition”
(Porter, 1985:1)
Competitive advantage = diamond diamond
therefore, clustering of competitive industries or interrelationships among clustering of competitive industries or interrelationships among related businessesrelated businesses
Porter (1990)
Business strategy, market structure and competition
Factors of production Domestic demand
Related and supporting industries
Sources of regional competitiveness Trade advantage / productivity
– price competition – non-price competition: quality, variety and
novelty
innovation and productivity
Only innovative firms/regions can be competitive
What is innovation?Innovation is:
“The search for, and the discovery, experimentation, development, imitation and adoption of new products, new production processes and new organisational set-ups”.
Dosi et al (1988), Technological Change and Economic Theory
Product innovationTechnology pull innovationDemand push innovation
Process innovationCost savings
Increase productivity
Radical innovation & incremental innovation
Innovation process: circular modelCIRCULAR MODEL
Source: Kline and Rosenberg (1986)
distribute and market
redesign and
produce
detailed design and
test
invent/ product design
potential market
RESEARCH
KNOWLEDGE
Features of innovationR&D is risky, uncertain and expensive
Innovation = information= knowledge (tacit vs. codified)
Innovation depends of human, social and relational capital
Innovation is cumulative and partly immobile
Innovation is learning (by doing, by using and by interacting)
Camagni (2002) technical progress is technical progress is notnot a public a public good; it is good; it is notnot perfectly mobile and accessible to perfectly mobile and accessible to everybodyeverybody
Therefore, the innovation process is not mobile but embedded
systemic innovation capacitysystemic innovation capacity
The competitive advantage of regions/localities depends on the immobility of some production factors: knowledge and innovation
Three models: Innovative milieux, RISRIS and industrial district
Regional innovation systemPROXIMITY: face-to-face contacts create informal, trustworthy and long term networking
NATURE OF LINKAGES BETWEEN FIRMS:–Cooperation over innovation: JV, joint projects, joint training– Horizontal and vertical cooperation over innovation between firms (supply chain)
–Linkages between firms and knowledge centres and business support organisations
LEARING AND KNOWLEDGE SHARING
HUMAN CAPITAL: Knowledge is embodied in human capital
APPROPRIABILITY Withdraw innovation from competitors to appropriate the full returns VS. DIFFUSION: cost of being first-mover; if technology –pushed innovation, need to create demand and to set new standards; and need for diffusion
DEVELOPMENT PATTERN: spontaneous or exogenously driven
Institutional RIS vs. Entrepreneurship RIS
Why policy matters?1.INNOVATION PROCESSES ARE IMMOBILE
•core – periphery divide
2.SYSTEMIC INNOVATION CAPACITY•The attractiveness and competitiveness of localities depend on macro context and local HC, SC and RC determine the learning capacity of the system
3.PICKING WINNERS or HORIZONTAL SUPPORT?
Krugman is critical of Govt’s ability to choose ‘strategic sectors’, however support can be horizontal through ‘real services’
Innovation policy
Barcelona European Council 2002
Objectives: Increase R&D investment to 3% of GDP by 2010 Encourage investment in human capital and intangible
assets Create and support innovative clusters and networks Create and support regional innovation systems
Employmenthi-tech 2002
< 7.45
< 7.45 – 9.55
< 9.55 – 11.65
11.65 – 13.75
>= 13.75
No data
Sources: Eurostat
Average = 10.6Standard Deviation = 4.30
Cambridge innovation system Bottom up development (human capital from Cam Uni, business
community and support infrastructure) Born in 1960, 350 firms in 1985, 2000 in 2000 and 3500 in 2003 Information tech, biotech, nano tech/materials Great transport and comms infrastructure Institutional infrastructure
– 6 UniCam research centres– Cam-MIT link– 11 regional agencies (e.g. GOE, EEDA, chamber of commerce)– Local venture capital network (17 funds)– 9 science parks– 3 incubators– Business support firms (law, accounting, patent, consulting,
banks) 14 initial companies attraction of big players (e.g Hitachi,
Microsoft, Toshiba and GSK) Massive govt funding via the Cam Entrepreneurship Centre
Birmingham innovation systemBham in not a RIS
Transitional economy from manufacturing to knowledge intensive activities/services
Institutional infrastructure: 6 Universities, about 50 colleges, chamber of commerce, many sector associations, RDA
POLICY is focusing on cluster development but:
Too many clusters
Clusters chosen because ‘fashionable’
Still embryonic
It will take time
Sector make upHigh-value added consumer products (jewellery, china, clothing)Screen image and soundEnvironmental technologiesBuilding technologiesTransportsBusiness servicesFood and drinkTourism and leisureManufacturingICTMedical technologies
Sector make upHigh-value added consumer products (jewellery, china, clothing) DOWNScreen image and sound EMBRYONICEnvironmental technologies UPBuilding technologies UPTransports DOWNBusiness services EMBRYONICFood and drink EMBRYONICTourism and leisure EMBRYONIC Manufacturing DOWNICT EMBRYONICMedical technologies EMBRYONIC
Reading listCoreBecattini, G., Bellandi, M., Dei Ottati, G. and Sforzi, F. (2003) From Industrial Districts to Local
Development, Cheltenham, Edward Elgar – ch 9R. Camagni, (2002) On the concept of territorial competitiveness: sound or mis-leading? Urban
Studies, Vo. 39, No. 13. P.Cooke, M. Gomez Uranga and G. Etxebarria (1997) Regional Innovation Systems: Institutional
and Organisational dimensions, Regional Policy, No 26M.E. Porter (2001) Regions and the New Competition, in A.J. Scott, Global City-Regions. Trends,
Theory and Policy, OUP, Oxford.
AdditionalR. Camagni (1993) Inter-firm Industrial Networks. The Costs and Benefits of Cooperative
Behaviours, Journal of Industry Studies, Vol.1 No. 1 P.Cooke, M. Heidenreich and H. Braczyk (2004) Regional innovation systems, Routledge, London, -
Introduction pp.1-18 and conclusion pp.363-389P.Cooke (2001) Regional Innovation Systems, Clusters and the Knowledge Economy, Industrial and
Corporate Change, Vol 10 No. 4.L. De Propris, N. Driffield and S. Menghinello (2005) Local Industrial Systems and the Location of
FDI in Italy, International Journal of the Economics of Business, Vol. 12, No.1S. Meghinello (2004) Local Engines of Global Trade: The case of Italian industrial districts, in G .
Cainelli and R. Zoboli (Ed.) The evolution of industrial districts, Physica-VerlagOECD (2001) Innovative clusters: drivers of NIS