Kautonen inno work-9-5_2012

TransNationalizing Innovation Systems: Channels and Platforms of Innovation and Competence (CHAPS)Research Programme of TaSTI/UTA

InnoWORK 9.5.2012, Tampere

Innovation without borders?New forms of internationalization

Dr. Mika KautonenAdjunct Professor

Unit for Science, Technology and Innovation Studies [TaSTI]University of Tampere, Finland


Content

1. Globalization of innovation activitiesa) some empirical evidenceb) forms of globalization

2. What will happen to national and localinnovation environments?

3. Discussion and conclusions


1. Globalization of innovation activities

Some empirical evidence (I)

• International technology flows steadily grown faster than the GDP from1997 to 2008 in a majority of the OECD countries (although in some largeeconomies the growth only on a same level than the growth of the GDP)

• Out of 25 countries, in 14 (mostly smaller) countries reported thatinnovative firms collaboration on innovation at least as much with foreignpartners than with domestic partners (CIS2006)

• Concerning cooperation on scientific articles during the last twentyyears, an evident tendency from single authorship to coauthorships butinternational cooperation, although grown considerably, not caught updomestic cooperation but the gap remained the same (the small countriesagain more open to international cooperation)

• Likelihood to foreign coauthorship increases in case of the highly cited topscientific articles; here the position of USA overwhelming.

(OECD “Measuring Innovation –A New Perspective” online version, 2010;Community Innovation Survey 2006 / Eurostat; Kautonen & Raunio 2011)



Some empirical evidence (II)

• Average share of international students seven per cent of all students onthe tertiary level within the OECD countries (Englishspeaking countries with astronghold as six countries in topseven)

• Concerning the geographical pattern of patent collaboration (coinvention), out of the total of 29 countries with the data, in ten countriesforeign coinventors as usual for inventors than domestic coinventors

Some evidence that the countries most involved in globalization of innovationthe smallest and the most technologically dynamic (c.f. Archibugi & Iammarino2002, 111) due to e.g. limited size of their domestic markets.



Why BIC and some others are entering theinnovation game? (I)

Cost structures• Wage rate differences: for highly skilled knowledge workers e.g. in

China and India 510 times below Western Europe and USA(although the gap getting narrower)

• Production followed by R&D and other innovation activities

New fastgrowing markets• Four consumer ties (annual per capita incomes; millions of people)

• more than $20,000 75100 (1. tier)• $1,50020,000 1,5001,750 (2.&3. tiers)• less than $1,500 4,000 (4. tier)

• Bottom of the pyramid, Prahalad 2004• Comes with new needs and with new perspectives for innovation



Why BIC and some others are entering theinnovation game? (II)

New connections• Share of imports and exports in global GDP increased from 40% in

1990 to 61% in 2006 (World Bank 2008)• Mobile phones, WWW, fiber optic networks and digitalization

New collaborations• Outsourcing, offshoring, global supply chains, unbundling• New business and organizational models

• Scope of R&D activities carried out in emerging economies broadened inrecent years; earlier limited to adaptation or at the most productdevelopment for the local market

• Since mid1980s, several developing countries build up technologicalcapabilities supporting R&D activities (Reddy 2011)

• Emergence of global technology units focusing on worldwide products.



Spikes of innovation: IT industry perspective(source: Grose 2008; 2007 Index of Silicon Valley)



Complex

Simple

Existential knowledge

Endemic knowledge

Experiental knowledge

Explicit knowledge

”Feel and live”

”Study and live”

”Experience and practice”

”See and study”

” Creep into the mind”• Movements/quality in Japan,

environment in Germany• Cultural assumptions (fashion,

music, arts)• R&D approach

” See through the eyes”• Vision statements• Management processes• Customer service manuals• Consumer behavior reports

” Jump into the shoes”• Practices and skills• Simple procedural routines

” Take a picture”• Technical blueprints• Patents

(slightly modified from Doz, Santos, Williamson 2001)

Knowledge complexity:Why going global is not that easy



Forms of crossborder innovation activities

• International exploitation of nationally producedinnovations

• Global generation of innovations• Global technoscientific collaborations

(Archibugi and Mitchie 1995, Archibugi et al. 1999, Archibugi and Iammarino 2002)

• Transnational innovation communitybuilding(Kautonen & Raunio 2011, Raunio & Kautonen 2011)



Forms of crossborder innovation activities (I)

International exploitation of nationally produced innovations

• By profitseeking firms and individuals in a form of 1) exports ofinnovative goods, 2) cession of licenses and patents, 3) foreignproduction of innovative goods internally designed and developed

• By public and nonprofit organizations as a transfer of good practicesand social innovations (service models, operation practices, concepts,policies etc.)

• Concerns the use by innovators to deploy their technologicalcompetences in markets (or other geographical entities) other than thedomestic one

• Labeled ‘international’ in opposition to ‘global’ because innovationsoften preserve their own national identity, even when they are diffusedand marketed in more than one country.



Forms of crossborder innovation activities (II)

Global generation of innovations• By multinational firms in a form of 1) R&D and innovative activities both

in the home and the host countries, 2) acquisitions of existing R&Dlaboratories, 3) greenfield R&D investment in host countries

• By supranational organizations as a transfer of good practices andsocial innovations (service models, operation practices, concepts,policies etc.)

• By individuals and firms in a form of virtual development projects (OpenSource Software, user communities etc.). Internet has provided a newplatform for virtual cooperation over long distances and has helped tocreate communities of specialists

• Focus on innovation generated on a global scale, often by multinationalenterprises (MNEs, see e.g. Bartlett & Ghoshal 1990); Innovations herebased on inputs from multiple locations in different countries and theseinnovations conceived on a global scale from the beginning.


Forms of crossborder innovation activities (III)

Global technoscientific collaborations• By universities and public research centres with 1) joint scientific projects,

2) scientific exchanges or sabbatical years, 3) international flows ofstudents• Always transmission of knowledge from one scholar to another in academic

world within a transnational setting, but...• Recently, activities of HEIs enormously expanded as not only knowledge

transfer to industry but HEIs entrepreneurial themselves e.g. setting upcampuses in foreign countries

• By national and multinational firms in a form of 1) joint ventures forspecific innovative projects, 2) productive agreements with exchange oftechnical information and/or equipment• Recently technological collaborations increased also within the private sector• Driven by a necessity to reduce the costs and risks of innovation and to cope

with its increasing complexity.



Forms of crossborder innovation activities (IV)

Transnational innovation communitybuilding• By “scientific diasporas” and transnational innovationrelated networks

(immigration powered social spaces, etc.)• By global innovation communities, brain circulation and “transnational

bridge builders” (expatnetworks / associations, etc.)• These are not necessarily directed to create innovations but they may

as “byproducts” and they may have a potential to enable them in transnational settings

• The power these communities may have in terms of innovation is intheir capability to overcome the cultural and cognitive distance thatmay be entailed in national borderlines or in lack of geographicalproximity.



2. National and local innovation environments

(Modified from den Hertog 2000; Arnold/Technopolis 2002; Smits & Kuhlman 2004)

Demand Framework Conditions

Industrial SystemEducation andResearch System

Political System

Infrastructure

Consumers (final demand)Producers (intermediate demand)

Large companies Professionaleducation, training

Mature SMEs

New knowledgeintensive firms

Banking, VC IPR, information Innovation &business support

Standardsand norms

Higher educationand research

Public sectorresearch

Government

Governance

Innovationrelatedpolicies

Financial environment; taxation and incentives;propensity to innovation and entrepreneurship;mobility

IntermediariesInstitutes,brokers, KIBS

Innovative users



Demand Framework Conditions

Industrial SystemEducation andResearch System

Political System

Infrastructure

Consumers (final demand)Producers (intermediate demand)

Large companies Professionaleducation, training

Mature SMEs

New knowledgeintensive firms

Banking, VC IPR, information Innovation &business support

Standardsand norms

Higher educationand research

Public sectorresearch

Government

Governance

Innovationrelatedpolicies

Financial environment; taxation and incentives;propensity to innovation and entrepreneurship;mobility

IntermediariesInstitutes,brokers, KIBS

Innovative users

Internationalstandards

e.g. EMU, Schengen area

e.g.EuropeanStructural

Funds

ERA,Bologna Process

/ EHEA

EPO, patentdatabases

Globalprovision of VC

GPNs &GINs

e.g. globaldemand & brands

global usercommunities



Questions and discussion (I)Concerning the opening of innovation environments/ systems…

… what kind of impacts can be considered due toglobalization of innovation for national or localeconomies / innovation environments?

… what could be the key measures to take to sustaintheir competitiveness?


Questions and discussion (II)Concerning the four forms…(International exploitation of nationally produced innovations Global generation of innovations

Global technoscientific collaborations Transnational innovation communitybuilding)

… which one(s) is usually a target of policies?

… are there examples of successful policies?



Questions and discussion (III)Concerning the four forms…(International exploitation of nationally produced innovations Global generation of innovations

Global technoscientific collaborations Transnational innovation communitybuilding)

… which one(s) is usually NOT a target of policies?

… why do you think this is the case?

… what could be done on a local/regional level?



3. Discussion and conclusions

Some conclusionsFor our innovation environments, it seems that…

… they will be more open and global but alsofragmented than before

… therefore they cannot be easily governed

… policy focus may have to turn more towardsbuilding different type of (innovation) communitiesthan fostering ‘systemicness’

… competences to operate in intercultural /cosmopolitan environments needed.


Many thanks!

http://www.uta.fi/tasti/[email protected]

http://www.uta.fi/tasti/

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