The changing face of innovation policy Programme on Regional Innovation University of Cambridge Belfast,17 June 2010 PLEASE DO NOT QUOTE WITHOUT PERMISSION
Apr 01, 2015
The changing face of innovation policy
Programme on Regional InnovationUniversity of CambridgeBelfast,17 June 2010
PLEASE DO NOT QUOTE WITHOUT PERMISSION
The changing face of innovation policy
• Innovation: the conventional wisdom• A new framework for innovation policy
Map of GDP?
Regional Innovation Scoreboard (RIS) 2009
Medium-high innovators
High innovators Average innovators Medium-low innovators
Low innovators
Source: RIS (2009)
Innovation: the conventional wisdom
• The importance of high technology manufacturing• The importance of R&D• Importance of corporate laboratories and
protecting IP• The role of Universities– Technology transfer– Low level of university-business collaborations in
the UK
Innovation and growth: the (Solow) paradox
• “You can see the computer age everywhere these days, except in the productivity statistics". Robert Solow, 1987, (MIT, Nobel Laureate)
• Economic growth is not apparently correlated with innovation
The Innovation (Solow) paradox
• Answer? – Innovation takes time to have a major
impact on economic growth.
• Why?– It is the use of technology not the
generation of technology that has the biggest impact on growth
The innovation (Solow) paradox
• US Productivity growth 1995-2000: the three largest contributors to the productivity surge were, in order:– wholesale trade– retail trade– security and commodity brokers
(Solow, CMI Summit 2001)
Bentonville AR.
Innovation: how important is R&D?
‘This country’s success ultimately depends on a strong skills base and dynamic R&D both driving an innovative and competitive economy...... The Government will continue to play its part by stimulating R&D investment. The recent changes to the Research and Development Tax Credit, for example, will bring additional benefits to small, medium and large companies alike’.Lord Drayson, Minister of State for Science and Innovation,The 2008 R&D Scoreboard, pp. 2-3
How important is R&D?
• EU target of increasing research and development (R&D) to 3 per cent of GDP by 2010
• Illusive or elusive ‘externalities’?• Frequent failure to distinguish between ‘R’
and ‘D’• Many innovating firms do little or no R&D
Innovation expenditure per employee (£ in 2004)
From: Abreu, Grinevich, Kitson and Savona (2008), Taking Services Seriously, NESTA
Innovation expenditure per employee (£ in 2004)
From: Abreu, Grinevich, Kitson and Savona (2008), Taking Services Seriously, NESTA
Importance of corporate laboratories
• Conventional view is that innovation takes place within the corporate laboratory
• But most ideas and most expertise are outside the organisation
• Importance of being open• Importance of being connected• Importance of Knowledge exchange
Source: Chesbrough, 2006
The implications of open innovation
• Importance of developing networks and communities– It is not costless– Often difficult for individual businesses
• Develop ‘boundary spanners’ – people who understand partners and can manage relationships
• Utilise economic anchors – organisations that do not move– Universities and Hospitals (‘eds and meds’)
Innovation: the role of universities
• The ‘laissez faire’ model– Importance of chance, luck and serendipity
• The narrow model– Focus on a narrow range of technology transfer
mechanisms
• The wider model– Focus on a wide range of interactions– Exchange rather than transfer
The laissez faire model• Universities focussed on two missions – research and
education• Example: the ‘Cambridge Phenomenon’ initially
developed when the University took little active interest in business engagement. In the past:– University largely ignored IP issue– Adopted a liberal attitude to what academics did– Industrial liaison merely acted as ‘window’ on
what the university did – little exchange or dialogue
The standard narrow model
• Narrow focus on Technology Transfer• Mechanisms: Patents, Licenses, Spin-outs• Limitations
– Model is incomplete – Potential financial returns were frequently over-
estimated – Metrics distorting behaviour (Goodhart’s Law: any
observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes)
Commercialisation Activities of Academics
• Patents (7% of academics)• Licenses (5% of academics)• Spin- outs (4% of academics)
The wider model: multiple knowledge exchange mechanisms
• A ‘systems’ approach and not simply ‘market failure’• Educating people• Problem solving• Role of many disciplines (not just STEM)• Interactions with public and third sectors as well as with
business • Public space functions (Universities do not move)
– Relatively neglected, but distinctive– Includes networking, social interaction, meetings, informal
advice etc• Focus on exchange not simply ‘transfer’
5
7
414
Licensedresearch
Patenting
Spun-outcompany Formed/run
consultancy
Commercialisation activities
Community-basedactivities
Lectures forthe community
Schoolsproject
Community-based sports
Publicexhibitions
People-based activities
Giving invitedlectures
Studentplacements
Participatingin networks
Standard-settingforums
Enterpriseeducation
Curriculumdevelopment
Attending conferences
Sitting onadvisory boards
Employeetraining
Format adapted from Ulrichsen (2009)
Academic Interactions with External Organisations
Source: Abreu, M., Grinevich, V., Hughes, A. and Kitson, M. (2009), Knowledge Exchange between Academics and the Business, Public and Third Sectors, Centre for Business Research, University of Cambridge, Cambridge.
65
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3328
31
33
6
38
30
3
15
5
7
4 14
57
49
4335
46
10 10
27
37
9Setting of physical facilities
Contractresearch
Consultancyservices
Externalsecondment
JointPublications
Prototyping and testing
Informaladvice
Researchconsortia
Hostingpersonnel
Jointresearch
Problem-solving activities
Licensedresearch
Patenting
Spun-outcompany Formed/run
consultancy
Commercialisation activities
Community-basedactivities
Lectures forthe community
Schoolsproject
Community-based sports
Publicexhibitions
People-based activities
Giving invitedlectures
Studentplacements
Participatingin networks
Standard-settingforums
Enterpriseeducation
Curriculumdevelopment
Attending conferences
Sitting onadvisory boards
Employeetraining
Format adapted from Ulrichsen (2009)
Academic Interactions with External Organisations
Source: Abreu, M., Grinevich, V., Hughes, A. and Kitson, M. (2009), Knowledge Exchange between Academics and the Business, Public and Third Sectors, Centre for Business Research, University of Cambridge, Cambridge.
Constraints on Collaboration
• Commonly cited constraints include:– cultural differences– disputes over intellectual property (IP)
• But, overall, these are not highly cited by in the businesses or academics
• Although they may be important for certain types of interaction
Academic and business perceptions of constraints on interactions
Source: Hughes, A. and Kitson, M. (2010), Connecting with the Ivory Tower: The Business Perspective on Knowledge Exchange in the UK, Centre for Business Research, University of Cambridge, Cambridge.
Innovation Policy: lessons from Europe
• Moderately superior comparators:– Schleswig-Holstein (Germany)– Wales (UK)
• Superior comparator:– Liguria (Italy)
• Significantly superior comparator:– Noord-Brabant (The Netherlands)
• Leading regions as target comparator:– Gothenburg (Vastsverige)– Southern Finland
A new framework for innovation policy
• Importance of local economic structure• Adopt a broad notion of innovation• Foster connectivity and openness• Importance of key regional economic
anchors• Develop a Triple Helix approach• Develop appropriate governance and policy
implementation
Importance of local economic structure
• Build on local strengths• Develop, transform and upgrade local
industries • More cost effective and a bigger impact then
developing new industries
Adopt a broad notion of innovation
• No simply about high technology manufacturing
• Importance of process• Importance of design• Importance of business practice• Importance of innovation in services and
‘traditional sectors’
A useful electronic device?
‘It has no camera; no USB port; no replaceable battery; no obvious advantage over a laptop, it doesn't support Flash’
Who would buy this?
Foster connectivity and openness
• Develop collaborative structures and communities
• Develop a professional skilled secretariat• Train ‘boundary spanners’• Networks must be outward looking and
inward looking• Move from giving grants to supporting
networks
Importance of key regional economic anchors
• Many economic actors move or can move– Skilled workers, businesses
• Importance of connecting to local economic ‘anchors’– Major employers, universities, hospitals
• Creates and embedded networked economy
High Tech Campus Eindhoven• In 1999, Philips decided to
concentrate all its innovation activities in one campus
• Since 2001 the campus has been open to other high-tech companies
• It operates under an “open innovation” policy
• Facilities are shared, and collaborations and knowledge exchange are encouraged
Develop a Triple Helix approach
• Triple Helix: foster and strengthen connectivity between business, universities and policy makers
• Fosters knowledge exchange and wider innovation
• Strengthens all partners and the local economy
ISH: Schleswig-Holstein
ISH: Schleswig-Holstein
• Public-private partnership• Foster and support collaboration between
academics and business to develop innovation• Provides (temporary) financial, institutional and
informational support• Supports development of facilities and
studentships in the regions’ universities• Objective is culture change and developing
long-term collaboration
The Triple Helix approach in Northern Ireland
• Northern Ireland has strong universities• The UK study of knowledge exchange in the
UK shows that academics from Northern Ireland engage in more knowledge exchange activity than academics from any other part of the UK
Governance and evaluation
• Collaborative structures need to be guided by the needs of business, academia and the policy community
• Focus should be long-term - and policy should not shift based on short-term changes or temporary
• Metrics should be concerned with innovation trajectories and behavioural change
Summary: Building a Networked Economy
• Importance of local economic structure – supporting key sectors – often large traditional sectors
• Role of key regional economic anchors– Universities, Hospitals, Large Businesses
• Importance of local culture and traditions• Importance of governance structures
– Policy must be long term– Impacts will take time– Importance of appropriate metrics
Summary Building a Networked Economy
• Building collaborative structures – between different businesses and with academia and government (Triple Helix approach)
• Structures must facilitate and manage relationships – providing finance/ grants is insufficient
• Importance of providing information on how to collaborate and the potential benefits