1 key components of innovation system s. t. k naim consultant comstech, islamabad 3-day regional...
TRANSCRIPT
1
Key Components of Innovation System
S. T. K NaimConsultant COMSTECH,
Islamabad
3-Day Regional Consultative Workshop on “National Innovation System and Intellectual Property”
7-9 October 2013, COMSATS, Islamabad
INVENTION AND INNOVATION
Invention
Creation of an idea of how to do or make something (usually by an individual)
“First occurrence of an idea for a new product or process” (Fagerberg, 2004)
"an increment in the set of total technical knowledge of a given society" (Mokyr, 1990)
Inventions may be carried out in universities, hospitals, R&D organizations
2
Innovation
Making an idea for a new product or process real, putting it into practice
Usually carried out in Firms First commercialization of an idea
(Fagerberg 2004) The act of creating a new good or service Innovation concept is commonly applied
to product, process or service innovation
3
National Innovation Systems
Definition “..the network of institutions in the public
and private sectors whose activities and interactions initiate, import, modify and diffuse new technologies.” (Freeman, 1987)
“..the elements and relationship which interact in the production, diffusion and use of new, and economically useful knowledge…and are either located within or rooted inside the borders of a nation state.” (Lundvall, 1992)
4
Organizational Innovation
Different types of innovations include: new products, new methods of productions, new sources of supply, exploitation of new markets and new ways to organize businesses (Schumpeter)
Organizational Innovation: US success to forge ahead was due to new ways to organize production and distribution
5
Radical and Incremental Innovation
Radical Introduction of new type of Innovation technology
Incremental Continuous improvement in Innovation product or process
Most innovations go through drastic changes in their life time: Automobile, Aero plane, Mobile Phones etc.
6
Innovation Concepts: STI and DUI Learning
STI Learning Human Development, Scientific Research,
Codification, R&D efforts and S&T organizations
Production of knowledge in Universities and codification
This captures only one form of learning. DUI (Doing, Using and Interacting)
on job training, production engineering, design, quality control, management, marketing
7
SI Approach focuses on three types of learning
1. Organizational learning takes place in firms and creates structural capital
2. Research and Development - carried out in universities, firms and R&D organizations – generated knowledge is often publically available
3. Competence Building – training and education both at schools, universities and at firms to create human capital
- These activities differ in quality and scope from one country to another
8
Six functional requirements for building IS (Staffan Jacobsson and Anna Bergek)
I. Knowledge Development and Diffusion - Identify knowledge gaps
II. Influence on the Direction of Search For an IS to develop, a whole range of firms
and other organization have to work together Not just identification of new opportunity but
incentives Coordination of investment between different
firms A fuel cell operated automobile requires
9Contd…
Investment in the development and production of fuel cells (Universities or Firms)
Fuel cell driven cars (Firms)
Production of energy carriers for fuel cells (Service providers)
Petrol stations for fuel cells
Coordination will require a range of firms supplying complimentary products and services
III. Entrepreneurial Experimentation From a social perspective many entrepreneurial
experiments take place. An IS without vibrant experimentation will fail
10Contd…
IV. Market Formation
For a new IS, markets may not exist, or be greatly underdeveloped
Public purchasing for market formation
Formation of standards is often a prerequisite for markets to evolve
Incentives for entrepreneurs who introduce new technology to the market
11Contd…
V. Legitimating
Legitimacy is prerequisite for formation of new industries
Social Acceptance, compliance with relevant institutions
VI. Resource Mobilization
As IS evolves different kind of resources needs to be mobilized. These includes
technical, scientific, financials etc.
12
Functions of Innovation System
Edquist (2004) identified 10 activities as essential functions of the Innovation system:
1. Research and Development
2. Competence building
3. Formation of new product markets
4. Articulation of user needs
5. Creation and change of organization
6. Networking around knowledge
7. Creating and changing institutions
8. Incubating activities
9. Financial institutions
10.Consultancy services 13
Functions of Innovation System
Lundvall (1992) added five more factors to the above 10
1. Competition
2. Openness to international trade
3. Capital flows (inward and outward FDI)
4. Labour market dynamics
5. Social welfare systems
14
Fundamental activities of an Innovation System
1. R&D for new knowledge creation
2. Competence building, investment in human capital, production and reproduction of skills, learning
3. Formation of new product markets (public purchasing)
4. Quality requirement from demand side (MSTQ system)
5. Establishing organizations and their frequent change with respect to new fields of innovation
15Contd..
Fundamental activities of an Innovation System
6. Networks through markets or other mechanisms. Interactive learning between different organizations
7. Creating and changing institutions e.g. IPR laws, tax laws, environment and safety regulations
8. Incubation facilities – providing access to facilities, administrative support
16Contd..
Fundamental activities of an Innovation System
9. Financing of innovation process and commercialization of knowledge
10.Consultancy services e.g. technology transfer, commercial information, engineering and other services
17
Stages in the development of an innovation system
18
UG
FF
TNCFTC
Emerging IS
UU
U
TC
FF
FF
FTC
TNC
G
Mature (well functioning) IS
Time
Indigenous Firms Government
Universities Transnational corporations
Technological centres
F
U
TC
G
TNC
Source: Chaminade and Vang, (2008)
A generic national innovation system
19
DemandConsumers (final demand)
Producers (intermediate demand)
Framework conditionsFinancial environment; taxation and incentives;propensity to innovations and entrepreneurship;
mobility, etc.
Companysystem
LargeCompanies
Mature SMEs
New TBFs
IntermediariesResearchinstitutesBrokers
Education andresearch system
Professional educationand training
Higher education andresearch
Public sector research
Political system
Government
Governance
STI policies
InfrastructureBanking, IPR andventure informationcapital systems Source: Arnold and Kuhlman (2001)
Regional Innovation System
1. Innovation activity is not uniformly distributed across the geographical landscape
2. Process of knowledge production exhibits a distinctive geography
3. Tacit knowledge become major sources of acquiring unique capabilities
4. Tacit knowledge is socially and culturally embedded and is context specific
5. Spatial proximity is key
- knowledge is sticky and localized learning with in the region- Supported by cluster policy 20
Sectoral Systems of Innovation
A sector is set of activities that are unified by some linked product
Sectoral system focuses on three maindimensions of sectors:
Knowledge and technology domain Actors and networks; Institutions (Norms, routines, established practices,
rules, laws, standards)
(national institutions, patent law, sectoral institutions: labour markets or sector specific financial institutions.)
21