REGIONAL INNOVATION SYSTEMS AS THE KEY TO GLOBAL COMPETITIVENESS: IMPLICATIONS FOR RURAL AREAS AND WORKERS by David Barkley and Mark S. Henry, Professors and Santosh Nair, Research Associate Department of Applied Economics & Statistics Clemson University
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REGIONAL INNOVATION SYSTEMS AS THE KEY TO GLOBAL
COMPETITIVENESS: IMPLICATIONS FOR RURAL AREAS AND WORKERS
by
David Barkley and Mark S. Henry, Professors
and
Santosh Nair, Research Associate
Department of Applied Economics & StatisticsClemson University
The Global EconomyThe Knowledge EconomyThe High-Tech Economy
The New Economy
Changes in TechnologyChanges in Production Practices
Changes in Location of Economic ActivityChanges in the Demand for Labor
Regional Innovation Systems
Research Triangle Park, (NC)
International Center for Automotive Research (SC)
Scripps Institute East Coast Facility (FL)
Translational Genomics Research Institute (AZ)
Oregon Nanotechnology & Microtechnologies Institute
Stowers Institute for Medical Research (MO/KN)
Table 1. Summary Characteristics of the “Old” and “New” Economies
Old Economy
Oligopolistic Product Markets
New Economy
Rapidly Expanding Service SectorLarge-Scale Manufacturing Intense International Competition
Standardized Products Small-Batch Production Runs
Assembly Line Production Just-In-Time Inventory Replacement
Table 8. Fastest Growing Occupations, United States, 2002-2012 (cont.)
Source: Hecker, 2004
OccupationQuartile Rank by
2002 Median Income
Typical Source of Education or Training
11. Fitness trainers and aerobics instructors 3 Postsecondary vocational award
12. Database administrators
1 Bachelor’s degree
13. Veterinary technologists and technicians 3 Associate degree
14. Hazardous materials removal workers 2 Moderate-term on-the-job training
15. Dental hygienists 1 Associate degree
16. Occupational therapist aides
17. Dental assistants
18. Personal and home care aides 19. Self-enrichment education teachers
3
3
4
2
Short-term on-the-job training
Moderate-term on-the-job training
Short-term on-the-job training
Work experience in a related occupation
20. Computer systems analysts 1 Bachelor’s degree
Table 9. Elements of Regional Systems of Innovation (Acs, 2002).
A. Inter-firm relationships 1. Network economies2. Clusters3. Supplier chains as source of innovation4. Cooperation and trust
B. The knowledge infrastructure 1. University research2. Focus new product R&D3. External sources of knowledge4. Local R&D spillovers
C. Community and the public 1. Emphasis on regional level sector 2. Public-private partnerships
3. Community, cooperation and trust
D. Internal organization of the firm 1. Organic organization 2. Continuous innovation 3. Matrix organizations
E. Institutions of the financial sector 1. Venture capital 2. Informal financial sector
F. Physical and communication 1. Global orientationinfrastructure 2. Electronic data exchange
G. Firm strategy, structure and rivalry 1. Easy to start new firms 2. Inexpensive access to
knowledge 3. Entrepreneurship is crucial
Table 9. Elements of Regional Systems of Innovation (Acs, 2002). (cont.)
Table 10. Examples of Innovation Measures Used in Previous Research on Innovative Activity or Capacity
A. Innovative Activity or Capacity
Patents
Academic R & D Expenditures
Industrial R & D Expenditures
Federal R & D Expenditures
Innovation Counts
Small Business Innovation Research (SBIR) Grants
Undergraduate/Graduate Degrees in Science and Engineering
Professional Employment in High Tech Industries
Table 10. Examples of Innovation Measures Used in Previous Research on Innovative Activity or Capacity
(Cont.)
B. Human Capital or Labor Quality
High School Graduates as % of Population
College Graduates as % of Population
Technical School Graduates as % of Population
Working Age Population
Managerial, Professional, and Technical Employment
Online Population
Computer Availability and Use in Schools
Table 10. Examples of Innovation Measures Used in Previous Research on Innovative Activity or Capacity
(Cont.)
C. Entrepreneurial Environment
Venture Capital Investments
Initial Public Offerings
New Publicly Traded Companies
Employment in “Gazelle” Firms
New Business Start-Ups
Job Churning (product of business start-ups and business failures)
Small Business Employment
Employment/Establishments in Business Services
Diversity of Population
Table 10. Continued
D. Agglomeration Economies
Employment/Establishments in High Technology Industries
Inc. 500 Companies
Population Density
Density of Establishments
Export Activity
Manufacturing Employment Growth Rate
Importance of Regional Economy to U.S. Economy
E. Competitiveness of Local Economy
Sources: Huovari (2001), Hill (1998), Catalytix (2003), Porter (2001), SGBP (2001, 2002), Atkinson and Gottlieb (2001), Gardiner (2003), Markusen (2001), Acs (2002), Florida (2002).
National State Technology & Science Index Overall Index, 2004
Rank Rank State (2004) State (2004)
Massachusetts 1 New Mexico 14California 2 New York 15Colorado 3 Pennsylvania 16Maryland 4 Arizona 17Virginia 5 Georgia 18Washington 6 Oregon 19New Jersey 7 North Carolina 20Minnesota 8 Illinois 21Utah 9 Vermont 22Connecticut 10 Texas 23Rhode Island 11 Ohio 24New Hampshire 12 Michigan 25Delaware 13
National State Technology & Science Index Overall Index, 2004 (cont.)
Rank Rank State (2004) State (2004)
Kansas 26 Hawaii 39Wisconsin 27 Alaska 40Nebraska 28 Wyoming 41Indiana 29 Louisiana 42Idaho 30 Nevada 43Missouri 31 South Carolina 44Florida 32 North Dakota 45Maine 33 West Virginia 46Tennessee 34 South Dakota 47Oklahoma 35 Kentucky 48Alabama 36 Arkansas 49Iowa 37 Mississippi 50Montana 38
Source: DeVol and Kuepp (2004).
Table 11. Selected Measures of Metropolitan Innovative Environment
A. Innovative Activity
PATENT: Number of patents issued per 1000 population (USPTO, 1990-99)
ARD: Academic R&D expenditures per 1000 population (NSF, 1998-2000)
SED: Doctorates awarded in science and engineering per 1000 population (NSF, 1998-2000)
GSS Graduate science and engineering students per 1000 population (NS, 1998-2000)
ETEC: Percentage of employment in technical professions – computer science; engineering except civil; natural, physical, and social science (BLS, 2000)
Table 11. Selected Measures of Metropolitan Innovative Environment (cont.)
B. Labor Force Quality
PHSG: Percentage of adult population (25+) that are high school graduates (CBP, 2000)
PCG: Percentage of adult population (25+) that are college graduates (CBP, 2000)
PWP: Percentage of population (age 16-64) that are employed (Census, 2000)
Table 11. Selected Measures of Metropolitan Innovative Environment (cont.)
C. Entrepreneurial Environment
PCEST: Percentage change in number of establishments (CBP, 1990-2000)
PEL2O: Percentage of establishments with fewer than 20 employees (BLS, 2000)
INC500: Number of Inc 500 companies per 100,000 population (www.inc500.com, 2000)
VCAP: Venture capital investments ($) per capita (Price Waterhouse Coopers, 2000)
EMB: Percentage of employment in managerial and business professions (BLS, 2000)
Table 12. Metropolitan Areas in Regional Innovation Systems Cluster Groupings (cont.)
5. Below Average (47)
Abilene, TX MSAAlbany, GA MSAAlexandria, LA MSAAmarillo, TX MSAAshville, NC MSAAuburn-Opelika, AL MSABeaumont-Port Arthur, TX MSABiloxi-Gulfport-Pascagoula, MS MSAChattanooga, TN-GA MSAClarksville-Hopkinsville, TN-KY MSAColumbus, GA MSACorpus Christi, TX MSADecatur, AL MSADothan, AL MSAEnid, OK MSAEvansville-Henderson, IN-KY MSAFayetteville, NC MSAFayetteville-Springdale-Rogers, AR MSAFlorence, SC MSA
Fort Smith, AR-OK MSAFort Walton Beach, FL MSAGoldsboro, NC MSAGreenville, NC MSAHattiesburg, MS MSAHickory-Morganton-Lenoir, NC MSAJackson, TN MSAJacksonville, NC MSAJonesboro, AR MSAKilleen-Temple, TX MSALafayette, LA MSALake Charles, LA MSALakeland-Winter Haven, FL MSALawton, OK MSALittle Rock-North Little Rock, AR MSALong View-Marshall, TX MSALubbock, TX MSALynchburg, VA MSA
Table 12. Metropolitan Areas in Regional Innovation Systems Cluster Groupings (cont.)
5. Below Average (47) (cont.)
Macon, GA MSAMobile, AL MSAMonroe, LA MSAMontgomery, AL MSAMyrtle Beach, SC MSAOdessa-Midland, TX MSAOwensboro, KY MSAPanama City, FL MSAPine Bluff, AR MSARocky Mount, NC MSASan Angelo, TX MSASavannah, GA MSASherman-Denison, TX MSAShreveport-Bossier City, LA MSASumter, SC MSATuscaloosa, AL MSATyler, TX MSAVictoria, TX MSAWaco, TX MSAWichita Falls, TX MSA
6. Low (18)
Anniston, AL MSA Brownsville-Harlingen-San Benito, TX MSA Danville, VA MSA Daytona Beach, FL MSA El Paso, TX MSA Florence, AL MSA Fort Myers-Cape Coral, FL MSA Fort Pierce-Port St. Lucie, FL MSA Gadsden, AL MSA Houma, LA MSA Huntington-Ashland, WY-KY-OH MSA Johnson City-Kingsport-Bristol, TN-VA MSA Laredo, TX MSA McAllen-Edinburg-Mission, TX MSA Naples, FL MSA Ocala, FL MSA Punta Gorda, FL MSA Texarkana, TX-Texarkana, AR MSA
Map 1: Persistent Poverty and RIS Counties, Southeastern United States, 2000
COUNTIES
Poverty
Persistent Poverty Counties
Metro Counties
RIS Counties
Other Non Metro Counties
Map 2: Persistent Poverty and RIS (Including Medium) Counties, Southeastern United States, 2000
Counties
Poverty
Persistent Poverty Counties
Metro Counties
RIS Metro Counties
Other Non-Metro Counties
Table 13. Mean Values for Indicators of Innovation by Cluster Grouping
Indicators Outliers High College Towns Medium Average Low