Science, Technology and Society November 2000

Science, Technology and Society November 2000

CENTER FOR INNOVATION, TECHNOLOGY AND POLICY RESEARCH, IN+

Instituto Superior Técnico, Technical University of Lisbon

http://in3.dem.ist.utl.pt

CENTER FOR INNOVATION, TECHNOLOGY AND POLICY RESEARCH, IN+

Instituto Superior Técnico, Technical University of Lisbon

http://in3.dem.ist.utl.pt

Technological Changeand

the challenges for Regional Development:building social capital in LFR’s

Pedro Conceição, Manuel Heitor and Robert Wilson

Technological Changeand

the challenges for Regional Development:building social capital in LFR’s

Pedro Conceição, Manuel Heitor and Robert Wilson

A fragmented regional innovation system: an institutionally blocked regional economy

RegionalGovernment

BusinessServices

SMEs

SMEs

Chamber ofCommerce

SMEs

SMEs

Largefirms

SMEs

Universities

TechnologyCenters

SectoralAssociations

SMEsSMEs

SMEs

SMEs

Largefirms

SMEs

SMEs

SMEs

SMEs

SMEs

SMEs

SMEs

SMEs

SMEs

SMEs

SMEs

SMEs

SMEs

SMEs

SMEs

TechnologyConsultants

SMEs

SMEs

Largefirms

SMEs

SMEs

Regional economy

A learning region: An efficient regional innovation system

Regionalgovernment

Businessservices &tech. con-sultants

SMEs SMEs

Businessintermediaries:

Cham. of Comm.;Local Agencies

BICs

SMEs

Large firms;Tech. Centers;Sect. Associa-

tions

SMEs

SMEs

SMEs

Cluster

Science base:Universities;Public R&D;Laboratories

TechnologyCenters

SectoralAssociations

SMEs

SMEs

SMEs

SMEs

Largefirms

SMEsSMEs

SMEsValorisation of R&D and Tech. Transfer Office

SMEs

Global econom

y

SMEs

SMEs

SMEs

SMEs

SMEsSMEs

SMEs

SMEs

SMEsSMEs

SMEs SMEs

SMEs

SMEs

Op

en g

ate:

In

tern

atio

nal

tec

hn

olog

y tr

ansf

er

net

wor

ks

Op

en gate: In

ternation

al value ch

ains

Open gate: International business consultants & specialized business services

Open gate: International R&D/academic excellence networks

SMEs

SMEs

Regionaleconomy

QUESTION

Which trends for technology-based development and cooperation, in a way to contribute for regional policies that stimulate localised learning, innovation and endogeneous development within LFR’s?

Which trends for technology-based development and cooperation, in a way to contribute for regional policies that stimulate localised learning, innovation and endogeneous development within LFR’s?

Our Argument...

The need for institutional renewal, …promoting diversity with institutional integrity at the supply side of technology,

(Conceicão & Heitor, 1999) The need for public investment

The scope:... the globalized “learning society”!The scope:... the globalized “learning society”!Knowledge Institutions Learning Organisations

Intellectual Property Learning Networks

Knowledge Institutions Learning Organisations

Intellectual Property Learning Networks

BUT, understanding the role of social capital (Conceicão, Gibson, Heitor & Sirilli, 2000), to stimulate the inclusive development !

BUT, understanding the role of social capital (Conceicão, Gibson, Heitor & Sirilli, 2000), to stimulate the inclusive development !

1. Technological change: accelerating

2. The “new” economy: “the big boom”

3. Social Dynamics: complexity and diversity

4. “Governance”: a new model!

The CONTEXT

OCDE: “FUTURES”, Hannover 2000

EC: “IPTS - Futures Report”, 2000

Technological Change:materials, IPTS(1999)

STEELS

CAST IRON

IRON

COOPER

ALLOYSTEELS

GLASSY METALS

AL-LITHIUM ALLOYS

DUAL PHASE STEELS

MICROALLOYED STEELS

BRONZE

SKIN FIBRE GUMS

RUBBER

LIGHTALLOYS

SUPER ALLOYS

TITANIUMZINCONIUMETC

NEW SUPER ALLOYSDEVELOPMENT SLOWMOSTLY QUALITYCONTROL ANDPROCESSING

CONDUCTINGPOLYMERS

HIGH TEMPERATUREPOLYMERS

HIGH MODULUSPOLYMERSBAKELITE

NYLON

WOOD

PAPER

STONEFLINT

POTTERT

GLASS

CEMENT

REFRACTORIES

PORTLANDCEMENT FUSED

SILICA CERMETS

EPOXIES

POLYESTERS

COMPOSITES

POLYMERS

METALS

CERAMICS

POLYMERS

COMPOSITES

CERAMICS

METALS

ALLOYS

10 000 BC 5000 BC 0 1000 1500 1800 1900 1940 1960 1980 1990 2000 2010 2020GOLD

CERAMIC COMPOSITES

COMPOSITESMETAL-MATRIX

SURFACEENGINEERING

RE

LA

TIV

E I

MP

OR

TA

NC

E

SUPERCONDUCTORSTOUGH ENGINEERING

CERAMICS

KEVLAR

BRICKS (with STRAW)

IVORY

10000 BC5000 BC

0 1000 1500 1800 1900 1940 1960 1980 1990 2000 2010 2020

Technological Change:

telecommunications

Technological Change:

perspectives The Convergence: telecommunications and computers ...

The QUESTION : scope and scale

PRODUCTS

PRODUCT

•more technologies to produce each product

•more products produced from a given technology

Source: von Tunzelmann (1999))

TECHNOLOGIES

PROCESSES

TECHNOLOGY

PROCESSES

New reactors

Nuclear fusion

New energy biomassPhotovoltaic materials

Fuel cells

Superconductors

Supervision of energy processes

Robotics

Security systems

energy

Batteries

Pacemakers

Artificial Heart

Recombin. DNA

New drugs

Enzymatic Synthesis

Membranes

Biocompatible materials

Instrumental analysis of dna sequences

biotechnologies

Power lasersBio-leaching

Biological ore processing

New alloys

Ceramics and composits

Computer based design of new materials

materials

Photovoltaic applications

Biosensors

Biochips

Semiconductors

Superconductors

Telematics

Automation

Computers

information technologies

energybiotechnologiesmaterialsinformation technologies

Emerging interactions...

Source: BIPE

fromto

New technologies

Existingtechnologies

2000 2010

Edudation / trainingfor last 10 years

2000 2010

Education / training acquired for more than 10 years

2010: 80% of technologies with less than 10 years, while 80% of working force has acquired training with more than 10 years

The knowledge gap (Scope: EUROPEAN REGIONS)The knowledge gap

(Scope: EUROPEAN REGIONS)

The importance of Technology in corporate development

Case study: Innovation in Italy (Evangelista & Sirilli, 1997)

The convergence of sectors is emerging, with the growing importance of technology in corporate development

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

93-95 96-98

Not relevant

Little relevant

Very relevant

The structure of the “new” economy

Agriculture

Indústry

Services

Agriculture

Indústry

Services

Industrial era

Knowledgeera I- Recession

II- Growth

Technology replaces employment

Economy without employment

Demand Deficit

Technology createsnew industries and opportunities

Entrepreneurial economy

Value creation

THE ISSUE …1

The evidence:The evidence:

• “The major source of economic growth in developed countries has been science-based technology”, Kuznets (1966)

• “The major source of economic growth in developed countries has been science-based technology”, Kuznets (1966)

• “The explosion in knowledge creation is concentrated in a few regions, and led to similarly concentrated distribution of income”, World Bank (1999)

• “The explosion in knowledge creation is concentrated in a few regions, and led to similarly concentrated distribution of income”, World Bank (1999)

• “The most daunting problem is that of spiritual inequality”, Fogel (1999)• “The most daunting problem is that of spiritual inequality”, Fogel (1999)

Regional diversity in Western Europe

Source: Sixth Periodic Report DG XVI, 1998

Case studies - Portugal

• North & GalizaAlexandra Campino, Danilo Rubini and Jorge Monteiro

• AlgarvePaulo Silva and Pedro B. Almeida

•LisbonAngela Canas, Rita Marreiros, Paulo Ribeiro and Ana Galvão

• North & GalizaAlexandra Campino, Danilo Rubini and Jorge Monteiro

• AlgarvePaulo Silva and Pedro B. Almeida

•LisbonAngela Canas, Rita Marreiros, Paulo Ribeiro and Ana Galvão

The context: M.Sc. Engineering Policy & Management of TechnologyThe context: M.Sc. Engineering Policy & Management of Technology

Case 1: North, Galiza North region (NUTII):

Area: 21 278 Km2 = 23,2% Portugal

Divided in 8 subregions (NUTIII);

Economic heterogeneity

Population in North

34413503

35453594

3687

3300

3400

3500

3600

3700

3800

1984 1994 1997 2000* 2005*

1000

inh

ab.

Minho-Lima7% Cávado

11%

Ave13%

Grande Porto34%

Tâmega15%

Entre-Douro-e-Vouga

7%

Douro7%

Alto-Trás-os-Montes

6%

Grande Porto weights 34% of North’s population

3,6 Million inhab. = 36% of portuguese population;3,6 Million inhab. = 36% of portuguese population;

Case 1: North, Galiza Galicia region (NUTII):

Area: 29 575 Km2 = 5.8% of Spain

Divided in 4 sub regions

2,7 Million inhab. = 7% of spanish population;

Cultural and social links with North region

Case 1: North, Galiza

Employment – Share Analysis (I)

1986 1994

Agriculture 24% 14%

Industry 33% 32%

Textiles &Leather 8% 8%

Services 43% 54%

Market Services 26% 33%

1986 1994

Agriculture 26% 15%

Industry 42% 44%

Textiles &Leather 17% 18%

Services 32% 41%

Market Services 20% 25%

Portugal North

- Relative large economic importance of Industry in the North;

- Textiles and Leather represents almost half of North’s economic structure;

- Increasing importance of Services for Portugal

Case 1: North, Galiza

Employment – Share Analysis (II)

1986 1994

Agriculture 41% 26%

Industry 20% 24%

Textiles &Leather 1% 1%

Services 39% 50%

Market Services 27% 32%

1986 1994

Agriculture 26% 15%

Industry 42% 44%

Textiles &Leather 17% 18%

Services 32% 41%

Market Services 20% 25%

Galicia North

- Industry’s share in Economic Structure of Galicia is almost half of North’s one;

- Services became the major employment sector for Galicia in 1994;

- Agriculture’s share includes fishery, which is a major asset to Galicia’s economy;

Case 1: North, Galiza

Productivity (I) (GVA/employee)

1986 1994

Agriculture 2.6 4.7

Industry 9.2 16.9

Textiles &Leather 7.9 11.5

Services 10.3 18.8

Market Services 13.1 22.4

1986 1994

Agriculture 1.7 3.1

Industry 8.1 14.8

Textiles &Leather 7.9 11.8

Services 9.7 18.6

Market Services 12.2 22.4

Portugal North

- North presents a lower productivity ratio for industry Labour Intensive consequence?

- No difference in Services Similar services firms?

1000ECU/employee

Case 1: North, Galiza

Productivity (II) (GVA/employee)

1986 1994

Agriculture 4.0 6.7

Industry 23.7 33.0

Textiles &Leather 15.5 24.3

Services 19.1 27.4

Market Services 21.8 31.9

Galicia North1986 1994

Agriculture 1.7 3.1

Industry 8.1 14.8

Textiles &Leather 7.9 11.8

Services 9.7 18.6

Market Services 12.2 22.4

- North: LOW productivity!!

- The difference in Services is lower than that observed in Industry;

1000ECU/employee

R&D – Regional Expenses, 1997

0

5.000

10.000

15.000

20.000

25.000

Mil

lio

n p

te 1

995

(c.p

.)

Norte Centro Lisboa eVale doTejo

Alentejo Algarve Açores Madeira

Região

R&D - Regional expenses, 1997

Universities

State

Private

Source: INE; Ministry of Science and Technology

Case 2: Algarve in PTCase 2: Algarve in PT

Shift-Share Analysis – GAV

Source: “The Algarve: Fate and Will” by Paulo Silva & Pedro Borges de Almeida

Growth of local sectors compared to national sectors 1990-1995 (Base 100 = Portugal) - GVA

40

60

80

100

120

140

160

180

1- Agricultural,forestry and

fisheryproducts

2-Manufactured

products

3- Building andconstruction

4- Recovery,repair, trade,lodging and

cateringservices

5- Transportand

communicationservices

6- Services ofcredit andinsuranceinstitutions

7- Othermarket

services

8- Non-marketservices

SectorsAlgarve Madeira

Case 2: Algarve vs MadeiraCase 2: Algarve vs Madeira

Sample Conclusions

1. The R&D regional effort of the Algarve is modest, but it is also not related with the main economic activities of the region.

2. Shift Share Analysis shows that Algarve was virtually unable, between 90 and 95, to grow due to inclusive factors, but it was not even capable of absorbing the growth induced by National development.

Sample Recommendations

To develop a regional development strategy based on a culture of excelence in all elements that are connected with Tourism & Leisure value chain:

- Natural and urban environment;

- critical infrastructures;

This requires the development of new competencies in the areas above, but also of the learning capabilities necessary to create new value from the Tourism & Leisure cluster.

Case 2: AlgarveCase 2: Algarve

National Growth Effect

Sector Mix Effect

Competitive Position Effect

0,52 0,58 177 153 -14% 111 -147 11

1,18 0,69 174 189 9% 109 55 -149

0,86 0,81 1 032 1 289 25% 649 -232 -160

Chemical products 1,41 1,55 125 171 37% 79 -42 8

0,76 0,89 185 352 90% 116 13 38

1,15 1,13 2 695 4 639 72% 1 696 565 -318

Services to companies 1,59 1,48 247 612 148% 155 286 -76Public authorities non-mercantile services 1,27 1,16 315 511 62% 198 70 -73Education and research services 0,82 0,89 140 387 176% 88 149 11Health and veterinary services 1 1,06 135 267 98% 85 44 3

TOTAL - - 4 262 6 621 55% 2 682 293 -616

SECTORS

Energy products and water

Industrial products – Total

Construction and public works

Services - Total

19941984

Agriculture, forestry and fishing

SHIFTSHARE ANALYSIS FOR GVA (109 PTE)

1984 1994% Change 1984-1994

Evolution components

LOCATION QUOTIENT FOR GVA

Case Study 3: Lisbon and Tagus Valley Region

•Specialization in: Services

Technology based Industry

Formal Knowledge

* Highest growth in

GVA

* Highest growth in

GVA

*

*

Case Study 3: Within Lisbon Metropolitan Area

* Except the city of Lisbon

Location Quotient Coefficient of Lisbon LMA North* LMA South Localization

1991 1997 1991 1997 1991 1997 1991 1997Agriculture and others 0,50 0,41 0,81 0,64 3,03 3,41 0,30 0,37Total Industry 0,49 0,39 1,56 1,49 1,62 1,65 0,15 0,17

Food industry 0,45 0,30 1,84 1,80 1,21 1,25 0,26 0,26Textile industry 0,44 0,33 1,50 1,34 1,89 2,12 0,26 0,25Others industries 0,65 0,66 1,50 1,37 1,19 1,16 0,15 0,11Chemical industry 0,58 0,39 1,59 1,75 1,24 1,11 0,19 0,25Machinery and tools 0,38 0,25 1,51 1,41 2,06 2,19 0,29 0,29

Construction 0,82 0,81 1,20 1,16 1,22 1,19 0,06 0,03Total Services 1,26 1,20 0,73 0,85 0,67 0,76 0,26 0,23

Distributive services 1,39 1,41 0,48 0,60 0,71 0,71 0,24 0,26Wholesale trade 1,18 0,88 0,95 1,24 0,51 0,82 0,13 0,07Retail trade 0,96 0,94 1,04 1,06 1,03 1,06 0,02 0,04Rest. and lodging services 1,09 1,14 0,91 0,87 0,86 0,90 0,08 0,13Telec. and postal services 1,65 1,50 0,24 0,57 0,30 0,53 0,38 0,30Producer services 1,58 1,50 0,34 0,59 0,34 0,49 0,34 0,30Education and health 1,10 1,05 0,87 0,93 0,91 1,01 0,09 0,09Others services 1,22 1,36 0,82 0,69 0,62 0,64 0,15 0,24

Sectors

LisbonSpecialisation in services

SurroundingsSpecialisation in industry

Concentration

Telec. and producer services - highly qualified workers

Case Study 3: Lisbon and Tagus Valley Region

Services (especially to firms and public services) as decisive to the region’s economy

High Knowledge concentration (high technology firms and formal knowledge: education and R&D)

Sample characteristics

Promote social capital, taking advantage of the already existing characteristics - services and high knowledge concentration - in order to promote value creation

Policy issues

Internet clustering ?

THE ISSUE …2

A specific issue: Regional DIVERSITYA specific issue: Regional DIVERSITY•“With some notable exceptions, the regional developmment debate in Europe has been dominated by exogeneous models to such an extent that development tends to be conceived as something that is introduced to, or visited upon, less favoured regions, LFRs, from external doors…

• …this kind of regional policy did little or nothing to stimulate localised learning, innovation and indigeneous development within LFRs”,

Henderson & Morgan (1999)

•“With some notable exceptions, the regional developmment debate in Europe has been dominated by exogeneous models to such an extent that development tends to be conceived as something that is introduced to, or visited upon, less favoured regions, LFRs, from external doors…

• …this kind of regional policy did little or nothing to stimulate localised learning, innovation and indigeneous development within LFRs”,

Henderson & Morgan (1999)

Innovation in EUsource: Community Innovation Survey, OCT-PT

IrelandAustria

Germany

Netherlands

UK

Sweden

Norway

France

Luxembourg

Finland

Belgium

Portugal

0%

20%

40%

60%

80%

100%

0% 20% 40% 60% 80% 100%

Share of Innovative Firms in Manufacturing

Sh

are

of

Inn

ova

tive

Fir

ms

in S

ervi

ces

Innovation in EUExpenditure by Manufacturing Firms on Innovation

Ireland

GermanyAustria

NetherlandsUK

Sweden

NorwayFrance

Finland

BelgiumPortugal

0%

20%

40%

60%

80%

0 0,02 0,04 0,06 0,08

Expenditure in Innovation (Share of Turnover)

Sh

are

of

Inn

ova

tive

Fir

ms

Innovation in PortugalProfiles of Hampering Factors

0%

10%

20%

30%

40%

50%

60%

Lack o

f custo

mers

responsiv

eness

Regula

tions a

nd

sta

ndard

s

Lack o

f in

form

atio

n o

n

mark

ets

Hig

h e

conom

ic r

isks

Lack o

f in

form

atio

n o

n

technolo

gy

Lack o

f appro

priate

sourc

es o

f fin

ance

Hig

h in

novatio

n c

osts

Org

aniz

atio

nal r

igid

ities

Lack o

f qualif

ied

pers

onnel

Sh

are

of

Fir

ms w

ith

Seri

ou

sly

Dela

yed

Pro

jects

Euro Average Portugal

• The need to consider technology-based development and cooperation in a broader context, leading to innovation:

–Promoting value, by exploiting change

–Understanding institutional development

–Integrating systems of competence building and social cohesion

The ISSUE ...concluding

OUR GOAL: to discuss the emergence of an agenda on regional policy

Regional Innovation Strategies...

Which specific driving forces? Which specific driving forces? 1. Productivity

2. The knowledge-based industries

3. Resouces: Scale vs intensity

4. Industrial structure

5. Institutional development:

market regulation; employment protection

6. The Sustainable development

1. Productivity

2. The knowledge-based industries

3. Resouces: Scale vs intensity

4. Industrial structure

5. Institutional development:

market regulation; employment protection

6. The Sustainable development

BUT, the regional dimension:...Social capital for the inclusive developmentBUT, the regional dimension:...Social capital for the inclusive development

The regional dimension:technology and innovation gap

The regional dimension:technology and innovation gap

1. Input: HUMAN AND MATERIAL RESOURCES

2. output: SCIENTIFIC AND TECHNOLOGICAL CAPACITIES

3. determining factors :• international cooperation

• sme`s: support services

networks

• FDI: integration in local economies

• transports, communications, energy infrastructures

1. Input: HUMAN AND MATERIAL RESOURCES

2. output: SCIENTIFIC AND TECHNOLOGICAL CAPACITIES

3. determining factors :• international cooperation

• sme`s: support services

networks

• FDI: integration in local economies

• transports, communications, energy infrastructures

… BUT, ALSO, INSTITUTIONAL FACTORS… BUT, ALSO, INSTITUTIONAL FACTORS

The regional dimension:technology and innovation gap …cont.

Most development programmes stand on their ability to build “social capital”: a relational infrastructure for collective action

Most development programmes stand on their ability to build “social capital”: a relational infrastructure for collective action

This requires a shift in development studies:

• from state-led or market-driven processes, regardless time, space or milieu

• to institutional perspective, looking at the quality of institutional networks

This requires a shift in development studies:

• from state-led or market-driven processes, regardless time, space or milieu

• to institutional perspective, looking at the quality of institutional networks

The regional dimension:technology and innovation gap …cont.

INSTITUTIONAL NETWORKS to mediate:

•mediate information exchange

• knowledge creation

•capacity for collective action

•potential for interactive learning

•efficacy of voice mechanisms

Henderson & Morgan (1999)

INSTITUTIONAL NETWORKS to mediate:

•mediate information exchange

• knowledge creation

•capacity for collective action

•potential for interactive learning

•efficacy of voice mechanisms

Henderson & Morgan (1999)

Social capital for inclusive development

0 10 20 30 40 50 60 70

Turkey

Mexico

Portugal

France

Italy

Germany

Belgium

Austr ia

Spain

Korea

Ireland

Japan

Iceland

Switzerland

UK

US

Netherlands

Australia

Canada

Denmark

Sweden

Finland

Norway

A Measure of Trust

0 10 20 30 40 50 60 70

Turkey

Mexico

Portugal

France

Italy

Germany

Belgium

Austr ia

Spain

Korea

Ireland

Japan

Iceland

Switzerland

UK

US

Netherlands

Australia

Canada

Denmark

Sweden

Finland

Norway

A Measure of Trust

OECD(2000)OECD(2000)

Policy Issues: Regional Innovation StrategiesLandabaso et al. (1999)

– Internal coherence of the regional innovation system by connecting its different key elements: R&TDI supply with well identified Demand and business needs, from SMEs in particular.

– Increase the amount and, more importantly the quality of innovation public spending through innovation projects (bigger and better spending in this field through regional policy).

– Rationalise the regional innovation support system by raising awareness, eliminating duplications, filling gaps and promoting synergies.

Successful stories: The Regional Technology Plans

Wales (UK), Limburg (Netherlands), Lorraine (France) and Leipzig-Halle-Dessau (Germany), Central Macedonia (Greece), Castilla Y Leon (Spain) and Abruzzo (Italy).

Successful stories: The Regional Technology Plans

Wales (UK), Limburg (Netherlands), Lorraine (France) and Leipzig-Halle-Dessau (Germany), Central Macedonia (Greece), Castilla Y Leon (Spain) and Abruzzo (Italy).

RIS generated ideas and practical results: Galicia examples

• Compilation and diffusion of strategic information on the innovation field to Galician SMEs through a Technological Observatory

• Campaign of visits by innovation management experts to local SMEs and publication of an ‘Innovation Guide’ for businesses

• Galician Innovation award for successful business introduction of new products, processes, management techniques, etc.

• Creation of a new fund to support high risk innovative projects

• Sponsor training programmes in new professions linked to innovation support services (financial analysts, technological auditors, technology rating…)

• Creation of the Galician network of R&TDI interface organisations

• Pilot design of an integral mechanism for supporting the process of innovation in 12 companies (9 SMEs).

Discussion: EU policy challengesSoete (2000)

-The current new growth regime associated with a knowledge driven society raises

major institutional challenges to EU and individual member countries

-Proposal of European “new deal” version: “cognitive Keynesianism” based on: a) recognition of the importance of public and private investment in education, learning and knowledge more generally for growth and equality (OECD target figures)b) “activating” education and developing incentives for such investments c) adherence to “open” features of the science and knowledge system enhancing transmission and knowledge diffusion aspects, reducing the blocking aspects of IPRs d) give political priority to importance of large social change: so far the knowledge driven society has been strong on economy and poor on society

Perspectives for “change”Perspectives for “change”

Building the conceptual framework

•The notion of localised technological change:

•The science base:

• a joint process of production, learning and communication

• a fully endogenous, with strong interdependence between specialisation and diversification

• important, but limited role of demand: learning capability is critical!

• based on mix of generic and tacit knowledge

” …the aim of policy should be to create a broad and productive science base, closely linked to higher education…”, Pavitt (1998)

Systems of Innovation and Competence Building!

Conceicão, Heitor and Lundvall (2000)

Systems of Innovation and Competence Building!

Conceicão, Heitor and Lundvall (2000)

•The role of Social Capital…•The role of Social Capital…

… debate

…the challenges for Regional Development:building social capital in LFR’s

opportunities for an Agenda on Regional Policy!

…the challenges for Regional Development:building social capital in LFR’s

opportunities for an Agenda on Regional Policy!

… debate

1. Productivity

D ecom position o f G D P per H our W orked in to E ffects o f W ork ing H ours, Labor Force P artic ipation and G D P P er C ap ita , 1997

G D P p er h o u r E ffec t o f G D P p er p erso n E ffec t o f E ffec t o f labor fo rce E ffec t o f w ork ing age T o ta l e ffec t G D P p er p erso nw o rked as a % w ork ing em p lo yed as a % unem ploy- as a % o f the w ork ing popu la tion as a % of labor fo rce as a %

of the O E C D A verage hours o f the O E C D A verage m ent age popu la tion o f the to ta l popu la tion partic ipa tion o f the O E C D A verage

(1 ) (2 ) (3 )= (1 )+ (2 ) (4 ) (5 ) (6 ) (7 )= (4 )+ (5 )+ (6 ) (8 )= (3 )+ (7 )

A us tra lia 96 0 96 -1 2 0 1 97A ustria 102 -4 98 3 -2 1 2 100B e lg ium 128 -5 123 -3 -19 -1 -22 101C anada 97 2 98 -2 2 2 2 100D enm ark 92 0 92 1 9 1 11 103F in land 93 0 94 -7 2 0 -5 88F rance 123 -9 113 -6 -9 -2 -17 97G erm any 105 -5 100 -3 -4 2 -4 96G reece 75 -4 71 -2 -11 1 -12 58Ire land 108 5 113 -4 -12 -3 -18 95Ita ly 106 -11 96 -5 -1 2 -5 91Japan 82 10 92 4 6 4 14 106T he N etherlands 121 -26 95 2 -4 2 0 96N ew Z ea land 69 8 77 1 3 -1 2 79N orw ay 126 -17 109 4 12 -4 12 122P ortuga l 56 2 58 0 1 1 2 60S pa in 84 13 97 -14 -13 2 -26 71S w eden 93 -3 89 -3 6 -4 -1 88S w itze rland 94 0 94 3 12 1 17 111T urkey 36 2 38 0 -8 -1 -9 29U nited K ingdom 100 -9 91 0 3 -2 0 92U nited S ta tes 120 -1 118 3 9 -2 10 128E U -14 103 -5 98 -4 -4 0 -8 90 S o urce: A rk and M cG uckin (1 9 9 9 ).

2. Knowledge-based industries

UK*

Belgium

Portugal**

Greece*

Sweden***

NL*

AustriaJapan

Norway

Canada

Denmark

Spain***

Denmark

Mexico

ItalyUS

France

Korea

Germany

0

2

4

6

8

10

12

14

0 10 20 30 40 50 60

Share in Business Sector Value Added of Knowledge Based Industries (share year 1996 except: *1995;**1993; ***1994)

Av

era

ge

An

nu

al R

ea

l Va

lue

Ad

de

d G

row

th o

f K

no

wle

dg

e B

as

ed

Ind

us

trie

s (

19

85

-sh

are

ye

ar)

OECD(2000)OECD(2000)

Share in business sector value added in knowledge business industries (share year 1996)Share in business sector value added in knowledge business industries (share year 1996)Av

era

ge

an

nu

al

rea

l v

alu

e a

dd

ed

gro

wth

of

kn

ow

led

ge

ba

se

d

ind

us

trie

s (

19

85

sh

are

ye

ar)

A

ve

rag

e a

nn

ua

l re

al

va

lue

ad

de

d g

row

th o

f k

no

wle

dg

e b

as

ed

in

du

str

ies

(1

98

5 s

ha

re y

ea

r)

0

0,025

0,05

0,075

0,1

0 0,125 0,25 0,375 0,5

Pub

lic

R&

D E

xpen

ditu

res

per

capi

ta

Private R&D Expenditures per capita

Canada

DenmarkFinland

France

Germany

Ireland

Japan

Netherlands

Norway

PortugalSpain

Sweden

UK

US

Belgium

Canada

Czech Rep

Denmark Finland

France

Germany

Hungary

Ireland

Japan

Korea

Mexico

Netherlands

New Zealand

Norway

Poland

Portugal

SpainSweden

Turkey

UK

US

3. Resources: Scale vs IntensityPublic vs private R&D expendituresPublic vs private R&D expenditures

P97

P95

P81

ESIR

SE

JP

USA

FR

D

UK

3. Resources: Scale vs Intensity

R&D Expenditure (OECD)

Sweden

Finland Japan

France

Germanythe Netherlands

Denmark

UK

US

Belgium

Austria

Ireland

Italy

SpainPortugal

Greece

0

0,005

0,01

0,015

0,02

0,025

0,03

0,035

0,04

100 1000 10000 100000 1000000

Scale- Total Expenditure in R&D ($PPP; logarithmic scale)

Inte

nsi

ty-

Sh

are

of

GD

P s

pen

t o

n R

&D

44. THE INDUSTRIAL STRUCTURE. THE INDUSTRIAL STRUCTURE

0

5

10

15

20

25

30

35

1983 1987 1991 1995

YEARFood, beverages & tobaccoTextiles, apparel & leatherWood products & furniturePaper, paper products & printingChemical productsNon-metallic mineral productsBasic metal industriesFabricated metal products

Other manufacturing, nec

EU-13

0

5

10

15

20

25

30

35

40

1983 1987 1991 1995YEAR

Portugal

5. Industrial structure: Dynamics

0,06

0,07

0,08

0,09

0,1

0,11

0,12

0,13

0,14

0,15

0,16

0,17

0,18

1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992

Australia

Austria

Belgium

Canada

Denmark

Finland

France

Germany

Greece

Italy

Japan

Korea

Mexico

Netherlands

New Zealand

Norway

Portugal

Spain

Sweden

UK

USA

6. Institutional DevelopmentMarket Regulation and Employment Protection

Nicoletti, Scarpetta & Boylaud; OECD (2000)