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Innovation: international aspects; lessons and perceptions
Dr Lynn Martin, Director of Entrepreneurship and Innovation University of Central England, UK
EUROPOS SĄJUNGA Europos socialinis
fondas
MYKOLO ROMERIOUNIVERSITETAS
Convergence – which country?
1. “Our country’s ability to compete in the global economy largely and increasingly depends on creating higher levels of value added through innovation”
2. “This nation can no longer rely on manufacturing.. the only way forward for us during global competition is to focus on becoming the number 1 global service economy…”
3. “The important issue is how to formulate policies to support a knowledge-based economy and society if we are to be competitive...”
4. “We are developing as a knowledge-based society. Technology and innovation policy improves competitiveness and development of the economy and society; with an innovation environment rated one of the best in the world, globally our R&D expenditure / GDP was third highest in the world ..
Innovation systems
Reviewing national innovation often forms a mapping of systems and instruments.
Mapping the national system of innovation implies a set of data placed on a matrix defined by two sets of parameters - the functions of the system and the stakeholders in the system .
There are also thematic maps related to sectors or scientific fields (Mullins Consulting, 2003)
National systems Analysis often focuses on:
the Innovation policy framework, – the range of major actors in innovation in the region or country, – policy both old and new, – data on innovation performance to identify strengths and weaknesses
and the legal regulatory and administrative environment. the human resources for innovation
– assessed and supported via teaching and training for innovation and via innovation management tools / ICT diffusion
the business innovation support measures.– the development of university-industry collaboration for knowledge
transfer, – better support for technology based start ups via a range of measures
including business incubation, plus – encouragement of business networks and sectoral clusters
Measures and assessments
‘hard factors’ – assessed quantitatively. – Examples - numbers of start-ups, numbers of patents etc.
‘soft factors’– the entrepreneurial culture, whether key actors in the national
innovation system are risk averse. This does not only include potential entrepreneurs but also those providing money, driving and implementing public policy.
Contexts. – local, regional and national contexts. – unfortunately even if you are not interested in the global
context, actors within the global context may be interested in you!
European perspectives
The European Council defined its objectives in terms of employment, economic reform and social cohesion (Lisbon, 2001)
“to become the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion”.
“to create some 15 million new jobs by 2010”
But Europe still needs to gain ground in innovation, is outperformed by the USA, by Japan etc in aspects of innovation (EIS, 2005).
Scoreboards!
Developed economies - 6 countries, the USA, Japan, Germany, the UK, France and Switzerland where 86% of the top 1000 Global companies are located (EIS, 2005).
Japan - economically well-developed, technologically competitive G7 and OECD member, with a strongly centralised and active innovation policy..
Korea, Taiwan and Singapore - 3 Asia ‘tigers’, rapid GDP growth in the last 30 years due to strong FDI, R&D joint ventures and US co-operation
China and India, large populations and landmass, rapid, uneven growth. Predicted to be dominant economies by 2050; a challenge for co-operation in high-tech and a threat for EU and USA - outsourcing
(Hira, 2003; EU, 2004).
Thailand and Malaysia fast GDP growth starting from a low base; combination of technologically modern and traditional industries. Indonesia is less advanced in development. All three countries are now pursuing or introducing systematic innovation policies.
Task environment?
the rise of Asian economies as dominant forces in the world economy the growth and dispersion of information communication technologies the changes in global financial systems and processes changes in international regulatory standards, developing international
accounting standards, common patent and intellectual property mobility of labour, establishments and processes the role of small firms worldwide as drivers of innovation While other related aspects have key impacts on innovation worldwide; these
include– health issues, Avian flu, HIV Aids– the environment, Kyoto protocols and the development of new energy sources– social changes implicit in the development of an innovation society and an
entrepreneurial culture– enterprise size and business life cycle, succession etc, e.g., for Asia-Pacific regions
Innovation – impacts for Europe the drivers in innovation are shifting
Services rule! User-based innovation, mergers - manufacturing and services, multidisciplinary groups public-private sector partnerships,
hard and soft factors; talent investment, infrastructure Too much single focus in policy re innovation, great learning points can be gained from other countries but
regional aspects are important High bureaucracy with low flexibility in the system globalisation of innovation and small firm-large firm innovation new European open source platforms – NESSI, digital business
ecosystem the enterprise culture needs to be present from early years to old
age.
Trends include
The rise of service and user-based innovations, – Customer-based supported by technology– service based innovation or manufacturing plus service– formed around groups, by multidisciplinary groups and by public and
private sector partnerships, by large plus small firm connections
globalisation of innovation – General convergence of aims– Rise of new forms of working from Asia
New technologies– emergence of new European open source meso-platforms may
build wide-ranging communities across different innovation actors – New model from India and china
Need for the enterprise culture from early years to old age.
Innovation effects
Innovation trajectories
Robotics – social impacts of humanoid robots; economic impacts of automation
Biotechnology – animal testing in the UK Genetically modified Organisms – tested
where? Testing and cell phones The internet and pornography
Innovation perceptions and reality?
Surveys in five countries to identify – what the word ‘innovation’ conveys, – how it is perceived and – who connects with it
Clear indications from the Scoreboards, from the USA and Finland in recent reports that innovation is about
Services, customers and groupings Involves talent, investment and infrastructure People, creativity, talent Better products better services better ways to do business, more choice
more money Small firms, small firms and large firms, public and voluntary sector
Perceptions of innovation include:– The man in the white coat / mad inventor– New leading edge technologies– New ways to do business– New products
Business sectors seen to be innovative – Information technology– Nanotechnology– Biotechnology,– Automotive, aerospace, manufacturing, engineering
Innovation is?
Perceptions - Innovation is
found in?– large firms, multinationals– companies with large research and development
teams– the USA and Japan
Not found in– Small firms– Public sector/ education etc.– UK / Europe
The perception? That Innovation is
About – Science and technology– Money and large scale investment– Products not services– Hard-headed business issues
Not about– People– Most people, e.g., women, ethnic minorities– Service based businesses– Passion and belief, Trust and values– The public or voluntary sector
Innovation is
Crucial to the future of UK manufacturing industry but– Larger companies capable of forming productive links with science
base; small firms need the help of brokers or intermediaries – Need to recognise existing strengths- don’t stick a fork in the toaster
Measures– Using key examples, a national network of intermediate institutes with
common identity, etc regional variations for local circumstances. – National database to allow manufacturers to locate providers of
technological expertise and capability.– Focus on de-regulation and simplification of bureaucracy
The realities? Innovation is
found across all industries– The hairdressing sector is worth 59 billion dollars in the USA
and is a source of considerable R & D, copyright and patents
found across gender and ethnic groups– Innovators and entrepreneurs come from all walks of life and
are rarely mad inventors, Mrs Ann Woods, CEO Ragdoll Productions
The problem? Raising aspirations and providing a background for them to be realised.
Summary
The right environment helps the level of entrepreneurship, i.e., finance , flexibility, low bureaucracy, culture
Focus broadly on international best practice and regional need
Tackling issues connected to finance, innovation and enterprise ambition and diversity are key factors in growth
Finding a solution to the regional paradigm Facilitating networking and the evolution of digital
business ecosystems.
Sources
The European Innovation scoreboard The Value Added Scoreboard The OECD benchmarking ands scoreboards The recent reports form the USA, e.g. from the Council
of Competitiveness The comparative report from Finland by Kotilainen,
(2005), for TEKES the National Technology Agency of Finland, September; Helsinki
Policy responsesPolicy needs to:
include both hard and soft factors to have impact on innovation and entrepreneurship
Include all forms of innovation and stages of the innovation process e.g., no over focus on specific sectors or on invention rather than commercialisation or vice versa,
learn from both established countries like the USA and newer economies like Korea, Singapore and Taiwan but regional aspects are important
combine less bureaucracy with more flexibility in systems, allow budding entrepreneurs and innovators to grow new business roots.
The Bank of England (1996)
UK = poor place to start a business Suggestions
– Increase profile of Business Links in assisting early stage technology-based firms;
– Using successful ‘serial entrepreneurs' to pass on their expertise and enthusiasm;
– Establishing a UK corporate venturing group to promote collaboration between large and small firms;
– Develop informal venture capital (Business Angels) and encouraging the banks to develop packaged finance for technology-based firms.
– Remove monopoly in the high street
