Transcript The importance of small firms in regional development

Innovation: international
aspects; lessons and perceptions
Dr Lynn Martin, Director of
Entrepreneurship and Innovation
University of Central England, UK
[email protected].
Convergence – which country?
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“Our country’s ability to compete in the global economy largely
and increasingly depends on creating higher levels of value added
through innovation”
“This nation can no longer rely on manufacturing.. the only way
forward for us during global competition is to focus on becoming
the number 1 global service economy…”
“The important issue is how to formulate policies to support a
knowledge-based economy and society if we are to be
competitive...”
“We are developing as a knowledge-based society. Technology
and innovation policy improves competitiveness and development
of the economy and society; with an innovation environment rated
one of the best in the world, globally our R&D expenditure / GDP
was third highest in the world ..
Innovation systems
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Reviewing national innovation often forms a
mapping of systems and instruments.
Mapping the national system of innovation
implies a set of data placed on a matrix defined
by two sets of parameters - the functions of the
system and the stakeholders in the system .
There are also thematic maps related to
sectors or scientific fields (Mullins Consulting,
2003)
National systems
Analysis often focuses on:
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the Innovation policy framework,
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the human resources for innovation
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the range of major actors in innovation in the region or country,
policy both old and new,
data on innovation performance to identify strengths and weaknesses
and the legal regulatory and administrative environment.
assessed and supported via teaching and training for innovation and
via innovation management tools / ICT diffusion
the business innovation support measures.
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the development of university-industry collaboration for knowledge
transfer,
better support for technology based start ups via a range of measures
including business incubation, plus
encouragement of business networks and sectoral clusters
Measures and assessments
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‘hard factors’
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‘soft factors’
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assessed quantitatively.
Examples - numbers of start-ups, numbers of patents etc.
the entrepreneurial culture, whether key actors in the national
innovation system are risk averse. This does not only include
potential entrepreneurs but also those providing money, driving
and implementing public policy.
Contexts.
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local, regional and national contexts.
unfortunately even if you are not interested in the global
context, actors within the global context may be interested in
you!
European perspectives
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The European Council defined its objectives in terms of
employment, economic reform and social cohesion
(Lisbon, 2001)
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“to become the most competitive and dynamic knowledge-based
economy in the world, capable of sustainable economic growth
with more and better jobs and greater social cohesion”.
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“to create some 15 million new jobs by 2010”
But Europe still needs to gain ground in innovation, is
outperformed by the USA, by Japan etc in aspects of
innovation (EIS, 2005).
Scoreboards!
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Developed economies - 6 countries, the USA, Japan, Germany, the UK,
France and Switzerland where 86% of the top 1000 Global companies
are located (EIS, 2005).
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Japan - economically well-developed, technologically competitive G7 and
OECD member, with a strongly centralised and active innovation policy..
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Korea, Taiwan and Singapore - 3 Asia ‘tigers’, rapid GDP growth in the
last 30 years due to strong FDI, R&D joint ventures and US co-operation
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China and India, large populations and landmass, rapid, uneven growth.
Predicted to be dominant economies by 2050; a challenge for cooperation in high-tech and a threat for EU and USA - outsourcing
(Hira, 2003; EU, 2004).
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Thailand and Malaysia fast GDP growth starting from a low base;
combination of technologically modern and traditional industries.
Indonesia is less advanced in development. All three countries are now
pursuing or introducing systematic innovation policies.
Task environment?
the rise of Asian economies as dominant forces in the world economy
the growth and dispersion of information communication technologies
the changes in global financial systems and processes
changes in international regulatory standards, developing international
accounting standards, common patent and intellectual property
mobility of labour, establishments and processes
the role of small firms worldwide as drivers of innovation
While other related aspects have key impacts on innovation worldwide; these
include
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health issues, Avian flu, HIV Aids
the environment, Kyoto protocols and the development of new energy sources
social changes implicit in the development of an innovation society and an
entrepreneurial culture
enterprise size and business life cycle, succession etc, e.g., for Asia-Pacific regions
Innovation – impacts for Europe
the drivers in innovation are shifting
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Services rule! User-based innovation, mergers - manufacturing and
services, multidisciplinary groups public-private sector partnerships,
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hard and soft factors; talent investment, infrastructure
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Too much single focus in policy re innovation,
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great learning points can be gained from other countries but
regional aspects are important
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High bureaucracy with low flexibility in the system
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globalisation of innovation and small firm-large firm innovation
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new European open source platforms – NESSI, digital business
ecosystem
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the enterprise culture needs to be present from early years to old
age.
Trends include
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The rise of service and user-based innovations,
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globalisation of innovation
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General convergence of aims
Rise of new forms of working from Asia
New technologies
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Customer-based supported by technology
service based innovation or manufacturing plus service
formed around groups, by multidisciplinary groups and by public and
private sector partnerships, by large plus small firm connections
emergence of new European open source meso-platforms may
build wide-ranging communities across different innovation actors
New model from India and china
Need for the enterprise culture from early years to old age.
Innovation effects
Innovation trajectories
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Robotics – social impacts of humanoid robots;
economic impacts of automation
Biotechnology – animal testing in the UK
Genetically modified Organisms – tested
where?
Testing and cell phones
The internet and pornography
Innovation perceptions and reality?
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Surveys in five countries to identify
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what the word ‘innovation’ conveys,
how it is perceived and
who connects with it
Clear indications from the Scoreboards, from the USA and Finland
in recent reports that innovation is about
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Services, customers and groupings
Involves talent, investment and infrastructure
People, creativity, talent
Better products better services better ways to do business, more choice
more money
Small firms, small firms and large firms, public and voluntary sector
Innovation is?
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Perceptions of innovation include:
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The man in the white coat / mad inventor
New leading edge technologies
New ways to do business
New products
Business sectors seen to be innovative
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Information technology
Nanotechnology
Biotechnology,
Automotive, aerospace, manufacturing, engineering
Perceptions - Innovation is
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found in?
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large firms, multinationals
companies with large research and development
teams
the USA and Japan
Not found in
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Small firms
Public sector/ education etc.
UK / Europe
The perception? That Innovation is
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About
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Science and technology
Money and large scale investment
Products not services
Hard-headed business issues
Not about
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People
Most people, e.g., women, ethnic minorities
Service based businesses
Passion and belief, Trust and values
The public or voluntary sector
Innovation is
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Crucial to the future of UK manufacturing industry but
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Larger companies capable of forming productive links with science
base; small firms need the help of brokers or intermediaries
Need to recognise existing strengths- don’t stick a fork in the toaster
Measures
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Using key examples, a national network of intermediate institutes with
common identity, etc regional variations for local circumstances.
National database to allow manufacturers to locate providers of
technological expertise and capability.
Focus on de-regulation and simplification of bureaucracy
The realities? Innovation is
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found across all industries
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found across gender and ethnic groups
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The hairdressing sector is worth 59 billion dollars in the USA
and is a source of considerable R & D, copyright and patents
Innovators and entrepreneurs come from all walks of life and
are rarely mad inventors, Mrs Ann Woods, CEO Ragdoll
Productions
The problem? Raising aspirations and providing a
background for them to be realised.
Summary
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The right environment helps the level of
entrepreneurship, i.e., finance , flexibility, low
bureaucracy, culture
Focus broadly on international best practice and
regional need
Tackling issues connected to finance, innovation and
enterprise ambition and diversity are key factors in
growth
Finding a solution to the regional paradigm
Facilitating networking and the evolution of digital
business ecosystems.
Sources
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The European Innovation scoreboard
The Value Added Scoreboard
The OECD benchmarking ands scoreboards
The recent reports form the USA, e.g. from the Council
of Competitiveness
The comparative report from Finland by Kotilainen,
(2005), for TEKES the National Technology Agency of
Finland, September; Helsinki
Policy responses
Policy needs to:
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include both hard and soft factors to have impact on innovation
and entrepreneurship
Include all forms of innovation and stages of the innovation
process e.g., no over focus on specific sectors or on invention
rather than commercialisation or vice versa,
learn from both established countries like the USA and newer
economies like Korea, Singapore and Taiwan but regional aspects
are important
combine less bureaucracy with more flexibility in systems,
allow budding entrepreneurs and innovators to grow new business
roots.
The Bank of England (1996)
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UK = poor place to start a business
Suggestions
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Increase profile of Business Links in assisting early stage
technology-based firms;
Using successful ‘serial entrepreneurs' to pass on their
expertise and enthusiasm;
Establishing a UK corporate venturing group to promote
collaboration between large and small firms;
Develop informal venture capital (Business Angels) and
encouraging the banks to develop packaged finance for
technology-based firms.
Remove monopoly in the high street