eight challenges for modern innovation policy development
DESCRIPTION
Presentation made for the Taftie Istanbul meeting November 2007 on major challenges for innovation policy development world wide.TRANSCRIPT
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The Innovation Policy Knowledge Base8 Global Trends and Challenges
Per Koch, Director for Analysis and Strategic DevelopmentThe Research Council of NorwayTAFTIE Conference Annalis’07, Istanbul Nov 28 2007
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Challenge No. 1: To shift from a technology push perspective to a vision of learning
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The linear model is not deadResearch and technological development in universities, RTOs and companies gives birth to an idea and relevant new knowledge
Companies make use of these ideas in the development of new products and processes
The company brings the new product to the market
The linear thinking lives on in a dominant technology push model
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The 3 percent objective is based on a linear model
1. Increase national investments in R&D
2. Produce more knowledge
3. Apply that knowledge to industrial production
4. Result: innovation
5. and wealth creation
There is nothing wrong in having increased investments in R&D as a policy objective, but here it is used as a proxy for innovation
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The systemic model of learning and innovation
Knowledge of customer and market needs
In-house learning
Marked knowledge
Tacit knowledge
Acquired technology
Literature
Conferences and fairs
New employees
Commissioned R&D
In-house R&D
market pull
Research is still very important, but is one of many learning tools. Indirect flow of R&D based knowledge and technology.
New or improved products, processes or services
User input
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Focus on other aspects of learning
R&D embedded in technology and human capital
Design
Branding
Organisational change
Management practices and types of ownership
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A new focus on research as a learning tool
The effects of R&D products on the innovation system
Company profits as result of sales of new or improved products, processes or services
Spillover effect 1: the new products leads to increasing productivity among customers
Spillover effect 2: the new products leads to innovation among customers and suppliers
The effects of R&D on learning in the innovation system
Research builds competences that can be used to absorb knowledge and technologies developed elsewhere
Research may lead to network building
University research teaches students how to use the tools of science
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Challenge No. 2: Understanding innovation in “low tech” industries
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OECD: ” There is a puzzle about Norway”
”Although measurement is incomplete,
R&D intensity appears weak,
patenting is moderate and
business surveys report a limited interest for innovative activity.
Yet,
the level of productivity is high in the mainland economy and
its trend growth enviable,
showing a capacity to absorb innovation spillovers
and undertake organisational and managerial changes.”
OECD Economic Survey Norway 2007
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Differences in industrial structure, 2003
0% 20% 40% 60% 80% 100%
Norway
Sweden
Denmark
Finland
Iceland
Lithuania
EU15
High medium-high medium-low low Primary Other services
Notes: high tech includes telecommunications, software, computing and other business servicesAnd medium-low includes construction and utilities.Source: STAN database and NIFU STEP
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Understanding innovation in resource based industries Resource-based industries
may be knowledge-intensive and profitable, but not R&D intensive
Farming, aquaculture fisheries, petroleum and mining
The word “high tech” is misleading, as it refers to R&D as a percentage of company turn-over, and not to the company’s use of advanced technology and knowledge
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Resource based companies do not invest much in R&D, but they
may make use of advanced technologies (often developed elsewhere)
and they do employ highly competent engineers and technicians
A lot of process innovation
Little R&D per company, but branches of industry as a whole may invest much (food)
Underreport R&D, as R&D is part of the whole production process
Use of other forms of innovation: branding, marketing
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Indirect use of research
MS Kristian With Refrigeration/containership built by Vaagland Båtbyggeri AS on the North-West Coast of Norway
Argon AS has installed the electronics
Radar, satellite phone and TV-antenna delivered by ProNav
Sonar, logg, radio and electronic map systems delivered by Furuno
Gyro compass and autopilot delivered by Simrad
The advanced technology has been “black-boxed”. You do not need to know how to build a TV to watch the Simpsons.
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Challenge 3: We need to get a better understanding of the role of services
The largest part of the economy
A very heterogeneous sector
A residual factor (what’s left when we leave out manufacturing and food)
We need a new categorization
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Important service sectors
B2C services: non-R&D companies, including retail, people care and tourism
Retail: Innovation in transport, storage, delivery and customer care
Tourism: Innovation in product range, presentation, transportation and marketing
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Services as partners and knowledge providers for industry
Advanced knowledge providers, e.g. R&D intensive B2B ICT companies (Knowledge intensive business services)
These companies may compensate for the lack of R&D in others.
Low R&D measurements in some industries may be an effect of outsourcing
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Challenge 4: Understanding the effects of public sector innovation
Innovation in the private sector is understood as an investment, in the public sector as an expense
Innovation in the public sector and the effect on industry
Public/private learning arenas
Public procurement
The effect of social welfare on risk taking and company behavior
We have no output indicators!
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Company
LearningNetworksinnovation
Customers and users
Suppliers
Policy-institutions
FinancialInstitutions
R&DInstitutions
Consultants
Public policy Cultural framework
International framework Industrial structure
Challenge 5: Understanding competence flows in the innovation system
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The role of competence flows
The role of education
User-driven innovation
Customer/supplier relationships
“Open innovation” and industry collaboration
The role of KIBS
The role of public sector institutions
National innovation systems must have porous boundaries.The EU is not competing with the US or Japan. This is not a zero-sum game!
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Challenge 6: Understanding the heterogeneity of innovation systems
Norway, Sweden, Iceland, Finland, the Netherlands, Bravaria, Catalonia, Northern Italy and the UK have all successful innovation systems that produces wealth.
But they are all totally different from each other.
Unique historical trajectories.
Unique socio-cultural framework conditions
There is no best practice.
Finland and Ireland cannot be used as models for other countries!
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Challenge 7: Understanding socio-cultural framework conditions Stable macro-economic framework
conditions
Disciplined fiscal policy
Competition policy encouraging innovation
Low taxes
An open economy
Socio-cultural framework conditions
Egalitarian culture with high social mobility
High wages for blue collar work gives impetus towards innovation (robots, internet banking)
High educational levels brings flexibility and labour mobility
An efficient public sector helps industry
A trustworthy welfare system reduces risk
Political and social stability gives trust
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Challenge 8: Cultural understanding in a globalised economy
Globalisation means that we have a cultural convergence at the same time as we see the birth of a large number subcultures
The Long Tail
International trade requires new language and culture skills
A new division of labor and specialization in the global markets
A new important role for the humanities and the arts
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Cultural decoding
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THE ENTERTAINMENT INDVSTRY REQVIRES HELP FROM THE ARTS AND THE HVMANITIES
TV series Rome
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Understanding and developing sub-cultures
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Design and identity: Apple & Jonathan Ive
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Challenges
1. A shift from a technology push perspective to a vision of learning
2. Innovation in resource based industries
3. Innovation in – and the role of -- services
4. The effects of public sector innovation
5. Understanding competence flows in the innovation system
6. Socio-cultural framework conditions
7. The heterogeneity of innovation systems
8. Cultural understanding in a globalised economy
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